Meta-analyzing ownership concentration and firm performance in Asia: Towards a more fine-grained understanding

We present a meta-analysis of the relationship between concentrated ownership and firm financial performance in Asia. At the cross-national level of analysis, we find a small but significant positive association between both variables. This finding suggests that in regions with less than perfect legal protection of minority shareholders, ownership concentration is an efficient corporate governance strategy. Yet, a focus on this aggregate effect alone conceals the existence of true heterogeneity in the effect size distribution. We purposefully model this heterogeneity by exploring moderating effects at the levels of owner identity and national institutions. Regarding owner identity, we find that our focal relationship is stronger for foreign than for domestic owners, and that pure “market” investors outperform “stable” or “inside” owners whom are multiply tied to the firm. Regarding institutions, we find that a certain threshold level of institutional development is necessary to make concentrated ownership an effective corporate governance strategy. Yet we also find that strong legal protection of shareholders makes ownership concentration inconsequential and therefore redundant. Finally, in jurisdictions where owners can easily extract private benefits from the corporations they control, the focal relationship becomes weaker, presumably due to minority shareholder expropriation.

Business groups in East Asia: Post-crisis restructuring and new growth

Business groups played an important role in the economic development of East Asian countries. Yet business groups in East Asia face an uncertain future. Following the Asian Crisis, foreign creditors and investors have demanded that business groups have more transparent operations and stronger corporate governance. At the same time, as governments in East Asia have loosened trade barriers, business groups have become subject to intense competition in domestic markets. This paper argues that business groups can survive or even prosper by taking initiatives in corporate restructuring. This paper also highlights some areas for further research on business groups in this region.

Opportunities and challenges for academic returnees in China

A growing number of Western-educated management PhD graduates are starting their academic career in Chinese business schools. While opportunities are abundant for these returnees, they also face the choice between developing internationally transferable assets and building locally embedded competences. Some possible solutions are discussed, at both personal and institutional levels.

Adoption of professional management in Chinese family business: A multilevel analysis of impetuses and impediments

Building upon the market, institutional, and cultural perspectives, this paper identifies the major impetuses and impediments that affect the professionalization of Chinese family business at the environment, firm, and owner levels. Our integrative framework projects that whether a family business owner will adopt professional managers is largely determined by the relative strength of impetus factors and impediment factors. We then discuss the possible governance choices under different configuration of impetuses and impediments. This theoretical framework is expected to help set the momentum for further conceptual exploration and empirical study in this area.

The adolescence of Asia management research: <Emphasis Type="Italic">APJM</Emphasis>, 1997–2006

In this article we reflect on the adolescent years of Asia management research published in the Asia Pacific Journal of Management (APJM) by reviewing work published in the past 10 years (1997–2006). We report that during the last decade, APJM has published 223 research articles, written by 373 different authors, who are affiliated with 203 different institutions. Our discussion of the future of Asia management research is guided by Kuhn’s (Kuhn, T. S. The structure of scientific revolutions. Chicago: University of Chicago Press, 1962) perspective on the nonlinear progression of science. We argue that as a growing community, Asia management research is finding its “identity” and establishing its presence in the larger worldwide management research community. Following our analysis, we conclude that the growth of Asia management research—as captured by APJM publications—throughout its “adolescent” years has set forth a challenging and exciting path for the future. All authors contributed equally. We thank Mike Peng (Editor-in-Chief) for his encouragement and advice. This work was completed when Yu-Shan Su was a Fulbright visiting scholar at the University of Texas at Dallas (UTD). She thanks the Fulbright Association and the Taiwanese Ministry of Education for partially funding this work.

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Knowledge management and innovation strategy in the Asia Pacific: Toward an institution-based view

The emergence of knowledge-intensive society has changed the nature of business competition. Knowledge management becomes an important managerial task and formulating a sound innovation strategy is an integral part of strategic management. Adopting an institution-based view, this article argues that the institutional environment in the Asia Pacific region plays a multi-faceted role behind firms’ knowledge management and innovation strategy. Specifically, institutions impose rules for legitimacy, serve as a source of knowledge, and allocate incentives and resources for innovation. We believe that future research drawing on the institution-based view has significant potential to advance our understanding of knowledge management and innovation strategy in Asia Pacific firms.

Japanese horizontal keiretsu and the performance implications of membership

Our study investigates the effect of Japanese horizontal keiretsu group membership on firm risk and return. Like prior studies, our results show that horizontal keiretsu membership has a negative effect on firm profitability. However, we find that horizontal keiretsu networks are likely to increase the gap between targeted and realized returns, which we call the outcome–aspiration gap. Moreover, in contrast to prior studies, our results indicate that keiretsu membership does not enable member firms to reduce risks by smoothing profitability. Instead, our findings provide evidence that is counter to the conventional notion that Japanese horizontal keiretsu allows their member firms to trade off profits for reduced risk.

A stage-dependent model of resource utilization,strategic flexibility,and implications for performance over time: Empirical evidence from a transitional environment

It has long been recognized that there is a tradeoff between exploration and exploitation. How organizations utilize resources across time and space will affect firm survival and growth. In this paper, we examine resource utilization and performance implications over time in an environment undergoing fundamental institutional transformation. Based on a large archive of Chinese government data from 1988, 1992, and 1996, the study finds that (1) the impact of resource utilization is contingent on the degree to which different resources are committed to factors of production, (2) the impact is curvilinear and only valid within an “optimal” range, and (3) the performance implications change over time. As firms enter later stages of the transitional process, efficiency becomes less important as they shift their strategic focus from exploitation to exploration, which requires more flexibility. These findings have significant bearing on the issue of upgrading technological competitiveness in China as the country becomes increasingly integrated in the global economy. Such insights may also have implications for other emerging economies in Asia.

National and corporate culture differences in international strategic alliances: Perceptions of Chinese partners

We consider the effect of national culture and corporate culture differences on the management of international strategic alliances (ISAs). Findings are based on the perceptions of a relatively large sample of Chinese partner firms in ISAs with foreign partners. We find that differences in national culture and corporate culture have contributed to a similar extent to differing views on ISA management. However, findings indicate that differences in national culture and corporate culture have a differential impact on aspects of ISA management. Perception of national culture and corporate culture differences and the contribution of those differences to differing views on the management of ISAs are greater in relatively younger ISAs compared with older ISAs. Managers in equity-based ISAs report fewer problems with culture related impediments to managing ISAs than managers in non-equity-based ISAs.

A comparative analysis of the internationalization of Chinese and Japanese firms

This paper integrates institution-, industry-, and resource-based views of internationalization and demonstrates that industrial characteristics, firm resources, and institutional factors can significantly explain the differences and similarities of international expansion of Chinese and Japanese multinational enterprises (MNEs). In particular, this paper maps the growth of Chinese MNEs since economic reforms in 1978 and that of Japanese MNEs after World War II. We illustrate the similarities and differences between Chinese and Japanese MNEs with two case studies: foreign direct investment (FDI) of Haier and Matsushita. We suggest that how firms internationalize, in addition to being influenced by industry- and resource-based considerations, is inherently shaped by the domestic and international institutional frameworks governing these endeavors.

Venture capital in China: Past,present, and future

This article reviews the literature on venture capital in China and examines where China’s venture capital industry has been and where it is likely to go in the future. Since the 1980s, venture capital in China has grown steadily alongside the robust national economy. The future is likely to offer even greater opportunities, as entrepreneurs are encouraged and property rights improve. However, there will also be a period of transition as the market continues to mature and as new legal structures and commercial arrangements emerge. Venture capital in China has many interesting differences from that in Western countries. The venture capital industry is shaped by the institutional context and China is no exception to this. This article also examines some specific differences between the system in China and that of the United States. Future prospects for venture capital are also appraised as China continues its transition to a market economy.

Social capital and cross-selling within financial holding companies in an emerging economy

Social capital is the goodwill available to individuals or groups from their network of relationships. It is widely believed that social capital is useful in facilitating and governing hazardous transactions. But how social capital, in the context of a financial holding company (FHC), actually facilitates cross-selling is unknown, especially in an emerging economy. This article maintains that effective cross-selling requires an FHC to first access and accumulate comprehensive and tacit customer-specific knowledge (the “where from” condition) and then share and leverage this knowledge to other applicable business opportunities (the “where to” condition). The role of social capital and embedded ties is found to be critical to this process. Finally, we argue that the major route for the effective cross-selling within an FHC is from the commercial banking division to the underwriting division. Hypotheses are tested on the transactional data collected from Taiwan, and empirical results provide broad support for our arguments.

The development of entrepreneurship in China

In this paper, we provide an overview of the extant research on the development of entrepreneurship in China. This research focus is a relatively recent phenomenon since China’s market transition started from late 1978. We review the literature over the 26 years from 1980 through 2005, as published in 11 leading English-language academic journals. We identify 68 articles from this review and analyze them based on the research subjects, methods, and firm types. From this review, and integrating with research on market transitions, we propose a three-stage model of market transitions that has important implications for entrepreneurship research in transition economies.

Competitive dynamics research: An insider’s odyssey

This paper introduces competitive dynamics research, a body of work that has emerged in the strategic management field over the last two decades. I will focus on my scholarly pursuit—both the substance and the process—during the early years of my faculty career. I will use my twelve core publications written during this period to outline the entire research program, highlight the makeup of each of the four sub-streams of the program, and show how these streams are linked. I will also share my personal learning in the process of building this research program. The paper aims to convey some firsthand experience for researchers and scholars, especially those starting in their careers and international scholars who are interested in publishing in major U.S.-based journals, so they can construct their own research programs and cope with the manifold process challenges in research and publishing.

Business groups and market failures: A focus on vertical and horizontal strategies

Drawing from transaction cost economics and strategic management, this paper develops a series of propositions that link market failure with corporate strategy. In doing so, the paper focuses on both vertical and horizontal strategies as strategic approaches that could be used to address different types of market failure. The significant contribution of the paper lies in its deconstruction of the various types of market failure and developing a theoretically grounded set of propositions that identifies appropriate corporate strategic responses that can be used to ameliorate the negative consequences of each type of failure. In doing so it also explores the evolution of business groups and the viability of strategic choices that groups are likely to make as they navigate the emerging market terrain.

Feeling trusted by business leaders in China: Antecedents and the mediating role of value congruence

This paper examines the antecedents of felt trust, an under-explored area in the trust literature. We hypothesized that subordinates’ felt trust would relate positively with their leaders’ moral leadership behaviors and negatively with autocratic leadership behaviors and demographic differences between leaders and themselves. We also hypothesized the above relationships to be mediated by the leader-member value congruence. Results supported our hypotheses that value congruence mediated between autocratic leadership behaviors and demographic differences and subordinates’ felt trust, but not moral leadership behaviors, which had direct effects on subordinates’ perception of feeling trusted. Theoretical and practical implications are discussed.

The first decade of the Asia Academy of Management

This paper briefly reviews the history of the Asia Academy of Management, the official sponsor of the Asia Pacific Journal of Management. It is suggested that establishing the Asia Academy of Management is a response to the new challenges of the academic institutional environment, both in Asia and in the mainstream management research community. Judging from the achievements in terms of reputation in the region, publication citations, school rankings, and internal organizational development, this new venture has added significant value to the global academic community. The challenges facing the Asia Academy, however, include the need to attract more interested parties to actively involve in its activities, more genuine cooperation among Asian and non-Asian institutions, and a need to affirm the contributions of Asian management studies.

Research rankings of Asia Pacific business schools: Global versus local knowledge strategies

Despite the increasing recognition of the importance of the research mission of universities, no previous work has investigated the research productivity and research strategies of Asia Pacific business schools. This article fills this important gap by conducting the first study to rank the publication productivity of 130 Asia Pacific business schools. Drawing on data from the UTD Top 100 Business School Research Rankings™ and several additional sources, we rank Asia Pacific business schools’ research productivity in three areas: (1) twenty-four leading business journals, (2) seven top management journals, and (3) five Asia Pacific management journals. We also extend this analysis by documenting the distinct publishing strategies of various Asia Pacific business schools—global, local, or both.

The impact of state shares on corporate innovation strategy and performance in China

This paper examines the impact of state shares on corporate innovation strategy and performance in the People’s Republic of China (PRC). Through an investigation of 541 publicly traded companies in five high-tech industries during the period between 2000 and 2005, we find that the presence of state shares have a positive effect on the corporate choice of a process innovation strategy over a product innovation one. However, this relationship is moderated by the overall ownership concentration ratio. Moreover, our findings suggest that companies with large state shares prefer to conduct innovations independently rather than collaboratively with others, and they usually achieve better innovation performance. These findings indicate that the government play a role as both an investor and a resource allocation coordinator and therefore complicate the relationship between ownership structure and corporate innovation activities.

Collectivism,individualism, and outgroup cooperation in a segmented China

A consistent theme in cross-cultural management research is that collectivists are more cooperative than individualists. We use Hofstede's measure for individualism–collectivism and combine it with an experimental measure of cooperation to test this relationship in China. In contrast to the established paradigm, we find that groups with higher individualistic scores are more cooperative than those groups with higher collectivistic scores. We attribute these results to groups being composed of outgroup members. In addition, we find that subjects from the more developed coastal area are more individualistic and cooperative than are subjects from inland China.