Unfolding China’s state-owned corporate empires and mitigating agency hazards: Effects of foreign investments and innovativeness

Zhu, John Jian Jun; Tse, Caleb H.; Li, Xu

doi:10.1016/j.jwb.2019.02.001

Cited by 24 publications

(19 citation statements)

References 167 publications

(259 reference statements)

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“…Firm size was measured as the natural logarithm of the total assets of the firm. In addition, we controlled regulatory uncertainty and dysfunctional competition because these factors might influence the resource acquisition and technology protection, thus affecting innovation (Gaur et al, 2019;Zhu et al, 2019). Regulatory uncertainty refers to the extent to which governmental regulations and policies change unpredictably and frequently and was measured using a scale developed by Li and Atuahene-Gima (2001).…”

Section: Methodsmentioning

confidence: 99%

“…China provides a rich setting to test our model because it is one of the largest emerging markets that is going through huge institutional and market changes (Wei and Ling, 2015). Given the increasingly changeable demands and upgrading technologies, the role of innovation becomes more salient for Chinese firms (Yiu et al, 2018;Zhu et al, 2019). To survive and maintain competitive advantages in such a highly complex and unpredictable environment, Chinese firms must not only improve their current offerings but also develop new ones to avoid the loss of market share and earnings (Yi et al, 2012).…”

Section: Procedures and The Samplementioning

confidence: 99%

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From CEO passion to exploratory and exploitative innovation: the moderating roles of market and technological turbulence

Cai

2020

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PurposeInnovation has been identified as a critical element to achieve firms' growth. The purpose of this study is to investigate the impact of chief executive officer (CEO) passion on firm innovation, including exploratory and exploitative innovation and examine the moderating roles of market and technological turbulence.Design/methodology/approachThis study adopts the methodology of survey and uses multisource and time-lagged data of 146 firms in China. Seemingly unrelated regression (SUR) is used to test the hypotheses of this study.FindingsThis study finds that CEO passion promotes exploratory and exploitative innovation. Results also indicate that market turbulence strengthens the effect of CEO passion on exploratory and exploitative innovation, whereas technological turbulence weakens such an effect.Originality/valueCEO passion is an important, positive affect which inspires CEOs to work for firms, but it has not yet received enough attention in the innovation literature. This study contributes to examining the impact of CEO passion on firm innovation and contributes to the contingency under which CEO passion influences firm innovation. Furthermore, this research finds that the moderating effects of market and technological turbulence are different in the relationship between CEO passion and firm innovation.

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Section: Methodsmentioning

confidence: 99%

Section: Procedures and The Samplementioning

confidence: 99%

From CEO passion to exploratory and exploitative innovation: the moderating roles of market and technological turbulence

Cai

2020

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“…Our instruments are appropriate for both theoretical and econometric reasons. First, although many government-affiliated Chinese firms were fully or partially privatized during the economic reform, the Chinese government has maintained control over firms that operate in strategic and emerging industries (Zhu, Tse & Li, 2019) to foster 'national champions' and improve public provision. However, these firms are not necessarily more innovative or more profitable than their counterparts in other high-tech sectors (Xu & Wang, 2015).…”

Section: Estimationmentioning

confidence: 99%

The role of government affiliation in explaining firm innovativeness and profitability in emerging countries: Evidence from China

Wang

Kafouros

et al. 2020

Journal of World Business

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Drawing from institutional polycentrism, we advance understanding of how affiliation with different government levels influences innovativeness and profitability in emerging countries. Our framework suggests that as different government levels vary in their objectives and resources, they affect firm innovativeness vis-à-vis profitability in qualitatively different ways. The analysis of 18,430 Chinese firms shows that affiliation with higher-level governments enhances firms' innovativeness, whereas affiliation with lower-level governments is effective for enhancing profitability. Our framework also clarifies how location-specific institutional substitution occurs, indicating that the usefulness of government affiliation for innovativeness depends on how effectively legal institutions protect intellectual property in each region.

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“…This last point suggests that a strategy for other kinds of firms may be to use a joint venture partner to avoid potential limitations that the government might impose (Zhu and Sardana 2020 ). And from the opposite perspective, at least for Chinese SOEs, their performance has been better when they have foreign investors involved, such as SAIC with GM and Volkswagen and foreign listings that attract portfolio investors (Zhu et al 2019 ).…”

Section: Dual Hegemonic Stability and International Business In The Tmentioning

confidence: 99%

China’s Rise, World Order, and the Implications for International Business

2021

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It is increasingly clear that China’s economic and political power rivals that of the US. This is potentially a serious problem for multinational companies, since China’s rise could lead to more US–China trade conflict and disruption of supply chains, threatening new and ongoing foreign direct investment, and drawing other countries into the jostling for power. However, we argue that globalization is not necessarily endangered by China’s emergence as a comparable power to the US. The US and China both have vested interests in maintaining the open economic order, and these two countries are each providing the global public goods that incentivize economic openness among other countries of the world. In this paper, we develop a theory corresponding to this argument and provide evidence that globalization has not declined even as the global distribution of power has shifted. While global integration is likely to persist, disruptive skirmishes between the US and China will occur with some regularity. Therefore, we suggest that international company strategies today should focus more on risk management related to policy shifts stemming from China’s rise and less on achieving least-cost global supply chains. We present a risk management framework for this purpose.

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Unfolding China’s state-owned corporate empires and mitigating agency hazards: Effects of foreign investments and innovativeness

Cited by 24 publications

References 167 publications

From CEO passion to exploratory and exploitative innovation: the moderating roles of market and technological turbulence

From CEO passion to exploratory and exploitative innovation: the moderating roles of market and technological turbulence

The role of government affiliation in explaining firm innovativeness and profitability in emerging countries: Evidence from China

China’s Rise, World Order, and the Implications for International Business

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