Ning Hu, Shilei Yu, Yanan Cao, Savannah (Yuanyuan) Guo, Yu Wang
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引用次数: 1
Abstract
Research Question/Issue
Based on Property Rights Theory and Empowerment Theory, this paper uses the establishment of local State-Owned Assets Supervision and Administration Commissions (SASACs) as a quasi-natural experiment to investigate whether and how SASACs improve the efficiency of state-owned enterprises (SOEs).
Research Findings/Insights
(1) After the establishment of SASACs, and compared to those not supervised by the SASACs (i.e., the control group), SOEs governed by local SASACs (i.e., the treatment group) have experienced a significant increase in decentralization and empowerment from the government, proxied by corporate pyramid levels. We also find increased pay-performance sensitivity for SOE managers and higher productivity measured by total factor productivity (TFP). (2) SASACs adopt different strategies to manage SOEs in monopolistic and competitive industries. (3) The above effect of the SASACs is more pronounced in SOEs supervised by high-quality governments that effectively protect property rights, enforce fair contracts, apply laws and regulations to everyone, and sufficiently refrain from expropriation.
Theoretical/Academic Implications
Using a quasi-natural experiment, this paper expands the existing literature on SOE reform from the perspective of incentive reform at the regulatory level based on Property Rights Theory and Empowerment Theory.
Practitioner/Policy Implications
(1) Privatization is not necessarily the only optimal solution for SOE reform. We show that the unification of power and responsibilities can be very effective and is perhaps less costly and more practical than privatization. Thus, our study provides an encouraging solution for SOE reform for other countries. (2) Countries experiencing SOE reform should also work on strengthening their government quality in order to fully maximize the benefit of the reform.
期刊介绍:
The mission of Corporate Governance: An International Review is to publish cutting-edge international business research on the phenomena of comparative corporate governance throughout the global economy. Our ultimate goal is a rigorous and relevant global theory of corporate governance. We define corporate governance broadly as the exercise of power over corporate entities so as to increase the value provided to the organization"s various stakeholders, as well as making those stakeholders accountable for acting responsibly with regard to the protection, generation, and distribution of wealth invested in the firm. Because of this broad conceptualization, a wide variety of academic disciplines can contribute to our understanding.