REGIONAL ANTI‐CORRUPTION EFFORT,POLITICAL CONNECTIONS AND FIRM INNOVATION EFFORT: EVIDENCE FROM CHINA

This paper examines how firm characteristics and local anti‐corruption effort moderate the influence of political connections on enterprises’ private R&D investment using data from 2,587 Chinese A‐share listed enterprises. Our results show that the local anti‐corruption institutional environment significantly moderates the strong relationship between political connections and enterprises’ private R&D investment. Firm characteristics (i.e., firm size and firm age) also show a moderating effect on the relationship between political connection and enterprises’ private R&D investment; larger and older enterprises are more likely to have innovative resources and business cooperation partners, and thus are able to reduce their degree of reliance on political connections and government funding. The results of our study suggest the importance of having a transparent and fair institutional environment for enterprise innovation activities.     

Quality of institutions and productivity of State-Invested Enterprises: International evidence from major telecom companies

The quality of institutions is at the core of the differences in the growth of income and productivity of nations. A growing body of evidence shows how this is also true at the firm level. After taking stock of earlier theoretical and empirical literature on the efficiency of state-owned versus private enterprises, while we consider ownership as the core internal governance mechanism of firms, we add quality of government as a determinant of the external institutional environment. To disentangle the effect of internal and external institutions on firms' productivity, we use different sets of ownership and institutional environment indicators.After having identified the top 350 private, state-invested (i.e. partially state-owned) and state-owned enterprises in the telecommunications industry in EU28 and in more than 60 other countries between 2007 and 2015, we empirically investigate models of firms' productivity augmented with ownership and quality of government. Our findings suggest that, after controlling for the regulatory and competitive conditions at the country level, on average, public ownership has a negative impact on firm-level TFP. This effect is however mitigated by high external institutional quality and even reversed in some countries with a particularly favourable institutional environment.     

异质机构、企业性质与自主创新

本文通过放松经理人市场的完全竞争性假定,拓展了经典职业生涯模型,藉此研究了中国制度背景下的机构持股、企业性质与企业创新的关系,并基于2004—2009年923家上市公司的数据,从R&D投入和专利申请两个维度对本文拓展模型的命题进行了实证检验。结果表明:(1)异质机构对企业创新有不同的影响,证券投资基金对企业创新有显著的负效应,这种负效应在国有企业中表现得更为明显;(2)民营企业中机构投资者持股促进了企业的创新活动,国有企业中机构投资者持股与企业创新呈显著的负相关关系;(3)机构投资者整体持股对全样本企业的专利申请有不显著的正效应,而对R&D投入则有显著的负效应。     

Is Tinkering with Institutional Quality a Panacea for Firm Performance? Insights from a Semiparametric Approach to Modeling Firm Performance

There is a large and growing literature on the impact of institutional quality on economic performance and the broad consensus is that “good” institutions facilitate better economic performance. The literature that provides micro‐level support for the policy discourse about institutional quality does not, however, account for significant intra‐country variation in reactions of firms to changes in business environments, even within the same industry, and it generally ignores the possibility that the impact of institutional quality on firm performance may not be neutral. In this paper, we analyze the impact of institutions on firm performance using an approach that enables us to overcome these problems with the stylized approach. Using cross‐country firm‐level data, we demonstrate that not only does the marginal impact of institutional quality vary significantly within countries, but also that the impact is economically significant only at the two extremes of the distribution. We view this as prima facie evidence that policies that tinker with institutional quality on the basis of the popular wisdom about the impact of these institutions on the average firm may not have the desired or expected impact, at least at the micro level.     

Liquidity Shock,Credit Constraint and the Development of Private vs. State-Owned Enterprises

Based on firm level data for the period of 1998–2007, this paper attempts to explain the growth differences between private enterprises and state-owned enterprises (SOEs) in China, in the context of liquidity shocks, and institutional and financial environments. It is found that (1) when liquidity tightens, the private enterprises face stricter credit constraints than SOEs, which restricts the development of private enterprise; (2) when liquidity becomes abundant, private enterprises face fewer financial limitations and grow much faster than SOEs; (3) the effect of liquidity shocks on the growth rate gap between private enterprises and SOEs has weakened during the period 2002–2007. These findings reveal that the credit discrimination against private enterprises can be mitigated by improving institutional and financial environments, which weaken the effects of liquidity shocks on firm growth.     

Institutional environment,ownership and firm taxation

This paper examines how ownership type and institutional environment affect firm taxation. Using a sample of Chinese‐listed firms from 1999 to 2006, we find that private firms enjoy a lower effective tax rate than local state‐owned enterprises. In addition, the preferential taxation of private firms is associated with local government incentives to promote local economic growth. We find that private firms located in regions with a lower level of privatization receive preferential tax treatment. Our results also suggest that decentralization and interjurisdictional competition lead to financial interdependence between local governments and private firms.     

Price–quality competition in a mixed duopoly

We examine competition between a private and a public provider in markets for merit goods, such as education, healthcare, housing, recreation, or culture. The private firm provides a high‐price/high‐quality variety of the good and serves richer individuals, whereas the public firm provides a low‐price/low‐quality variety and serves poorer individuals. We first characterize the private competitor’s best response to changes in the public firm’s price and quality. This enables us to examine the distributional effects of policies that affect the price or quality of the public firm’s product. We then numerically characterize the public firm’s optimal provision policy, taking the private response into consideration. Our results have implications for the financing of publicly provided goods, and for whether additional resources, if available, should be spent on reducing the price or enhancing the quality of these goods.     

The more subsidies,the longer survival? Evidence from Chinese manufacturing firms

How do government subsidies affect firm survival? By using Chinese firm‐level data for 1998 to 2007, we show that, on average, there is a positive and significant impact of government subsidies on firm survival. We also investigate the heterogeneous effects of government subsidies with different intensities on firm survival, and find that moderate‐intensity government subsidies exert a positive impact on firm survival, while high‐intensity government subsidies increase the exit probabilities, the underlying mechanisms via subsidy‐seeking investment and innovation incentive weakening are supported by empirical evidence. Furthermore, we explore the role of governance institutions in the subsidy–survival relationship, and find that the positive impact of government subsidies on firm survival is more pronounced in regions with better governance institutions.     

Models of trust-sharing in Chinese private enterprises

This paper presents two related models of development patterns of Chinese private enterprises. They illustrate incentive-based reasons for ownership arrangements of private enterprises, and highlight how institutional foundations of trust, particularly government and family-based cultural values, play an important role in influencing the development of private enterprises. These models attempt to explain why government and family-based culture are crucial for the ownership structure and management of private enterprises. The main argument in the models is that the structure of family businesses can be viewed, in essence, as a form of trust-sharing (Guanxi-sharing) arrangement within the firm. Furthermore, the increase in the prevalence of family businesses can be seen as a result of family trust replacing government trust in the firm's economic activities.     

You are suffocating me: Firm-level analysis of state-owned enterprises and private investment

Literature on whether government spending crowds out or crowds in the private sector is large, but still without an unambiguous conclusion. Using firm-level data from Ukraine, this paper provides a granular empirical investigation to disentangle the impact of state-owned enterprises (SOEs) on private firm investment in Ukraine—a large transition economy. Controlling for firm characteristics and systematic differences across sectors, the results indicate that the SOE concentration in a given sector has a statistically significant negative effect on private fixed capital formation, and that the impact of SOEs is stronger in those industries in which SOEs have a more dominant presence. These findings imply that private firms operating in sectors with a high level of SOE concentration invest systematically less than businesses that are not competing directly with SOEs.     

机构投资者对新创企业绩效的影响：一个被调节的中介模型

机构投资者能够改善企业治理效果,进而积极影响企业绩效,但该类研究都是基于成熟企业情境,未考虑新创企业情境的特殊性。基于新创企业研究情境,构建一个被调节的中介模型,从战略决策视角探讨机构投资者、创业导向及环境动态性对企业绩效的影响。结果表明,机构投资者显著抑制企业创业导向;创业导向正向影响企业绩效;创业导向在机构投资者与企业绩效之间发挥中介作用。研究还发现,环境动态性不仅负向调节创业导向与企业绩效的关系,还正向调节创业导向在机构投资者与企业绩效关系中的中介作用。研究结论有助于深入理解机构投资者影响企业绩效的作用机理及边界条件。     

高管持股对创新可持续性的影响研究

企业创新活动一旦中断将会产生巨大的调整成本损失。因此,如何保持企业创新可持续性是企业创新研究的重要问题。结合委托代理理论,探索了企业高管持股对创新可持续性的影响,并进一步讨论了高管过度自信与产权性质的调节作用。使用2003-2014年中国A股制造业上市公司面板数据进行实证分析,结果表明：高管持股对企业创新可持续性具有显著正向影响,高管过度自信则弱化了两者间正向关系,而相对于非民营企业,民营企业高管持股对创新可持续性的正向作用更强。同时考虑两种情境效应的综合影响时,在民营企业中高管过度自信的负向调节作用更强。最后,考虑了遗漏变量带来的“选择偏差问题”和内生性问题,采用基于Kernel匹配得分法的反事实检验,为实证结果提供了稳健性证明。     

Measuring and Explaining Innovative Capability: Evidence from Southeast Asia

What causes firm‐level product innovation in developing economies? This paper answers this question by emphasizing the role of process improvements that are influential in product innovation. We construct a firm‐level innovative capability score using novel, broad‐based, but detailed data on various process improvement practices obtained from firms in Southeast Asia. We then investigate the factors that may affect innovative capability. We also estimate the effect of the innovative capability score on product innovation controlling for research and development intensity and other firm characteristics. Our empirical investigation identifies a chief executive officer (CEO)'s past experience at a foreign or large firm, and buyer pressure to adopt international standards as key determinants of innovative capability. Novel and unique findings from our examination include: (i) the impact of a CEO's past experience at a foreign or large firm on the innovative capability is larger for local enterprises and small‐ and medium‐sized enterprises; (ii) the impact of share of foreign workers in the upper managerial levels only appears to be significant in foreign firms and larger firms; and (iii) buyer pressure is a more likely contributor to innovative capability compared with capital tie‐ups with multinational enterprises or joint venture buyers that capture vertical technology transfers. Finally, our empirical results show that a firm in Southeast Asia is more likely to achieve product innovation if the firm has had a higher innovative capability.     

Privatization and capital formation in developing countries: an empirical analysis

The spur for privatization and its impact on economic performance have been analysed from many perspectives, including microeconomics, macroeconomics, and institutional economics. Previous research has focused on efficiency reasons for privatization at the level of the firm, and the relative performance of state‐owned enterprises and privately owned firms. This article investigates the macroeconomic facet of privatization with particular attention paid to the relation between privatization and capital formation in developing countries. Our study uses recent World Bank data on privatization for 105 countries over the time period 1988–2003. We explore the impact of privatization on capital formation by conducting two‐stage least squares and ordinary least squares estimations within three time frames. Our findings indicate that the effect of privatization on capital formation varies across regions and time frames. In general, privatization is neutral with regard to investment.     

The impact of institutions on financial development: Evidence from East Asian countries

This paper examines the impact of institutions on regional financial development using a panel data model of 11 East Asian countries during 1996–2017. It divides the institutional factors into six economic factors and six legal‐political factors. The analysis demonstrates that the legal‐political institutional factors have a stronger impact on financial development than the economic institutional factors in East Asia. Improvement in institutional quality such as fiscal freedom, business freedom, control of corruption, government effectiveness, regulatory quality and rule of law can promote financial development. Improvements of these institutional factors facilitate the ability of enterprises to allocate resources and improve the strength of business operations, thereby reducing transaction costs and making the financial operating environment fairer and more efficient. With the improvement of institutional factors, financial development will have more opportunities to develop better. Institutional impacts are more pronounced in the financial development in Malaysia, Indonesia, the Philippines and Myanmar than in the other countries such as China, Japan, Korea and Singapore.     

Bribery and firm survival in Vietnam: Moderating effects of market competition,credit, and institutional constraints

This paper examines the relationship between bribery and firm survival when facing different levels of market competition, credit constraints, and other institutional limitations. Using panel data from surveys of small- and medium-sized enterprises in Vietnam over a 10-year period and a semi-parametric Cox proportional hazards model approach, we provide empirical support for the “greasing-the-wheels” hypothesis of firm survival. Effects are found to be more pronounced for formally registered and larger firms, explained by their greater bargaining power vis-à-vis public officials. Moreover, bribery as a “risk-of-exit” reducing strategy is found only for firms not institutionally or financially constrained and for firms operating in sectors with low levels of competition.     

Causes of privatization in China

We test five hypotheses regarding the causes of privatization in China by using firm‐level panel data collected in 11 cities in the period 1995–2001. We have found that privatization is positively linked with hardened firm budgets and the extent of market liberalization, but is constrained by excessive debts and worker redundancy. Firm efficiency and state‐owned enterprises’ financial liabilities imposed on local governments are not factors of influence. These findings match the broad flow of events in China and highlight the role of market building in bringing about efficient institutional changes.     

双边关系质量与合作治理模式:整合分布式创新核心机制的概念模型

分布式创新是近年来技术创新领域的一个前沿主题,已有学者发现企业间双边关系质量对分布式创新结果和绩效具有促进作用,但关于其对分布式创新过程及治理模式的影响仍缺乏机理性认识。从社会网络视角,基于分布式创新机制与合作治理理论,提出了企业间关系质量—分布式创新机制—合作治理模式的分析框架。通过深入分析分布式创新中双边关系质量对合作治理模式选择的影响,构建了一个由分布式创新内在机制和合作涉及的技术范围组成的带有中介和调节作用的路径整合模型。总体来说,解释了双边关系质量通过完善分布式创新机制使得企业更倾向于选择股权合作模式的内在机理,希望通过该模型为后续学者提供一个分析双边关系特征与合作创新之间关系的新思路。     

Imported inputs and privatization in downstream mixed oligopoly with foreign ownership

This paper examines welfare implications of privatization in a mixed oligopoly with vertically related markets, where an upstream foreign monopolist sells an essential input to public and private firms located downstream in the domestic country. The impact on domestic welfare of privatizing the downstream public firm is shown to contain three effects. The first is an output distortion effect, which negatively affects welfare since privatization decreases the production of final good for consumption. The second is an input price lowering effect resulting from a decrease in derived demand for the input. When the level of privatization increases, a decrease in final good production lowers input demand, causing input price to decline and domestic welfare to increase. The third is a rent‐leaking effect associated with foreign ownership in the downstream private firm. The rival domestic firm strategically increases its final good production, causing profits accrued to foreign investors to increase and domestic welfare to decline. Without foreign ownership in the downstream private firm, the optimal policy toward the public firm is complete privatization as the output distortion effect is dominated by the input price lowering effect. With foreign ownership, however, complete privatization can never be socially optimal due to the additional negative impact on domestic welfare of the rent‐leaking effect. We further discuss implications for domestic welfare under different privatization schemes (e.g., selling the privatization shares to the upstream foreign monopolist or to the rival domestic firm).     

Structural change and misallocation: Firm‐level evidence from Poland*

Early transition literature linked a large number of firm failures with the inability to overcome the pre‐transition misallocation of resources, that is, the inadequate capital–labour ratio. We look at the link between misallocation and firm survival using a rich firm‐level dataset of over 1,600 manufacturing plants established in a centrally planned economy after 1945. Our duration models include the standard Olley–Pakes misallocation measures as well as a firm‐level measure of the counterfactual level of capital that takes into account the present‐day market allocation and productivity. We show that while privatization is positively related to firm survival, misallocation (a) was more of a firm‐level than sector‐level phenomenon and, more importantly, (b) it, in general, did not have a sizeable effect on the actual firm survival nor it had an impact on the outcome of privatization.