THE RESPONSE OF STATE‐OWNED ENTERPRISES TO IMPORT COMPETITION: EVIDENCE FROM CHINESE MANUFACTURING FIRMS

We examine the wage and employment impact on Chinese firms of an increase in import competition associated with China's WTO accession in December 2001, with an emphasis on state‐owned enterprises (SOEs). We find that both wage and employment are negatively impacted by an increase in import competition, but firms with high state ownership cut employment less and reduce wages more than their private counterparts, suggesting that they prioritize the protection of employment over that of wages. This finding supports the notion that SOEs may have ‘multitask’ responsibilities in terms of protecting employment as well as achieving efficiency. We also find that firms with higher capital intensity reduce their wages less but cut employment more in response to intensified import competition. This provides empirical support for the efficiency wage theory.     

STATE OWNED ENTERPRISES AS INSTRUMENTS OF INNOVATION POLICY

This article expands the literature on the rationales and governance of state owned enterprises (SOEs). We show that SOEs could be seen as instruments of innovation policies and change agents within broader innovation systems that can overcome many of the conventional challenges of innovation policy and its implementation, from coordination and implementation of policies and innovation system actor networks to financing innovation. We review the existing literature on the rationales of SOEs and extend it to include innovation as a central rationale. Thereafter we provide a taxonomy that reveals the necessary policy and managerial conditions and constraints for using SOEs as instruments of innovation policy. We place some of the better‐known innovation‐oriented SOE successes and failures into this taxonomy and show that this approach will allow in future research to explore different SOE practices and potential for using SOEs as innovation policy instruments across countries.     

CORPORATE SOCIAL RESPONSIBILITY INVESTMENT AND SOCIAL OBJECTIVES: AN EXAMINATION ON SOCIAL WELFARE INVESTMENT OF CHINESE STATE OWNED ENTERPRISES

We apply the theory of corporate social responsibility to analyse social welfare investment undertaken by Chinese State Owned Enterprises (SOEs). We present a simple theoretical model to illustrate how the presence of social objectives in the firm's objective function changes its investment behaviour. Our theoretical model accommodates special features of Chinese SOEs, whose social welfare investment is driven by both social objectives and profit concerns. The model is then tested using a panel of Chinese enterprises during the period 1995–1999. The empirical analysis indicates that despite of the corporatization reform social welfare investment undertaken by Chinese SOEs is still inefficient due to the lack of profit concerns, suggesting that social objectives still dominate profit concerns in motivating the SOEs' social welfare investment. However, we do obtain clear-cut evidence showing that social objectives become less important as time progresses.     

国有企业改革30年

经过30年的改革和制度创新,国有企业不但走出了困境,而且成为具有较高劳动生产率、较强盈利能力和竞争力的市场主体。理论研究与实践证明,很难有最优的所有制结构和股权结构。我们要毫不动摇地"坚持和完善公有制为主体、多种所有制经济共同发展的基本经济制度,毫不动摇地巩固和发展公有制经济",坚持在公有制为主体的框架内通过制度建设来完善国有企业公司治理结构。国有企业公司治理结构的完善是一项长期而艰巨的任务。     

THE EFFICIENCY OF THE STATE‐OWNED FIRM AND SOCIAL WELFARE: A NOTE

We consider a mixed market where a state‐owned firm competes with private firms. If the number of firms is exogenous, then a deterioration of the efficiency of the state‐owned firm might improve social welfare. This situation occurs when the state‐owned firm is inefficient and private firms are efficient. However, if the number of firms is endogenous, then a deterioration of the efficiency of the state‐owned firm must reduce social welfare.     

Pyramidal structure,risk‐taking and firm value

This article investigates the relationship among pyramidal layers, risk‐taking and firm value using a sample of local state‐owned enterprises (SOEs) in China. We find that state‐pyramidal layers have a positive and significant impact on firm risk‐taking and firm value, suggesting that the pyramidal structure formed by the state protects SOEs from political intervention. Risk‐taking is conducive to enhancing firm value and is one of the important channels through which state‐pyramidal layers increase firm value. By exploring the role of state‐pyramidal organizational structures in improving SOEs' risk‐taking, our results contribute to both corporate governance and corporate finance literature.     

政策协同视角下的中央企业重组与国有资本配置效率*

基于深化国企改革的政策协同视角，本文系统地考察了中央企业重组对国有资本配置效率的影响及作用机制。研究发现，中央企业重组能够长期性地改善国有资本效益，并且这一结果在不同重组方式下存在差异。机制检验表明，中央企业重组是通过降低成本、提高效率而非加剧市场垄断来提高国有资本效益的。进一步检验表明，深化国企改革，尤其是国有企业分类改革和改组组建国有资本投资、运营公司试点能够对中央企业重组起到政策协同效应。最后，中央企业重组还能够通过退市清算、产权转让等形式促使国有资本淘汰落后产能、化解过剩产能，同时布局重要行业并聚焦主业。本文的研究结论不仅及时回应了国企重组特别是央企重组效果及必要性的重要关切，而且为深入推进国企改革提供了有益启示。     

MODELLING SOCIAL ENTERPRISES

The majority of research concentrates exclusively on the objectives of governments, profit entities or non‐profit organizations, while a significant number of organizations are hybrids. One form of these hybrids is the social enterprise. This paper theoretically describes social enterprises taking into consideration their main aims. Based on the ‘earned income’ school of thought, the principal‐agent theory and considering the nature of social enterprises’ activities we propose the objective functions of their owners (principals) and managers (agents). The maximization problem of the social enterprise is defined as the weighted average of the utilities of two groups of stakeholders who have an influence on the degree of the realization of the social mission and business orientations. We point out the direction which social enterprises should follow in order to obtain the highest value of their objective functions. The desired state for social enterprises should be one in which they reinvest all surpluses in the process of their mission realization and their profit is slightly higher than the required level by the principal's contract.     

Provincial economic performance and underpricing of IPOs: Evidence from political interventions in China

We examine the underpricing of 2,131 Chinese initial public offerings (IPOs) between 2005 and 2017. The results indicate that state-owned enterprises (SOEs) controlled by the local government (local SOEs) offer significantly higher underpricing when they go public than SOEs controlled by the central government and non-SOEs do. This phenomenon is evident for local SOEs from less developed provinces, after controlling for the direct effect of regional economic performance. These results suggest local government officials underprice initial public offerings to make regional companies successfully go public to promote the regional economy.     

Means‐Tested Long‐Term Care and Family Transfers

One of the pervasive problems with means‐tested public long‐term care programs is their inability to prevent individuals who could afford private long‐term services from taking advantage of public care. They often manage to elude the means‐test net through ‘strategic impoverishment’. We show in a simple model how this problem comes about, how it affects welfare and how it can be mitigated.     

Private investment with social benefits under uncertainty: The dark side of public financing

We develop a game‐theoretic model of private–public contribution to a long‐term project with sequential actions and moral hazard. A private agent is one who is in charge of both the financial contribution and the management effort, these two actions entailing private costs and uncertain ex‐post private and social benefits. A public agent is one who decides the amount of public funding to this quasi‐public good, knowing that the size and the probability of attaining a surplus ex post depend on the private agent's effort. We consider four public‐funding scenarios: benefit‐sharing versus cost‐sharing crossed with ex‐ante versus ex‐interim government intervention. We test our theoretical predictions by means of an experiment that confirms the main result of the model: Cost‐sharing public intervention is more effective than benefit‐sharing in boosting private financial contribution to the project. Furthermore, when public intervention comes after private contribution ( ex‐interim government intervention), both public‐funding scenarios have a negative impact on the private management effort. In our model, the latter result is explained by the private agent's high degree of risk aversion. These results have policy implications for strategic investments with long‐term social consequences. In deciding the optimal timing and method of the contribution, governments should also consider the indirect effects on agents’ long‐term management efforts.     

Selection of public servants into politics

Countries differ substantially in how they deal with politicians that come from the public sector. Most constitutions include incompatibility and ineligibility rules due to concerns about conflicts of interest and the politicization of the public service. We study how these rules affect the attractiveness of parliamentary mandates for public servants and thus the selection into politics. We compile a novel dataset that captures the fraction of public servants in 76 national legislatures as well as the respective (in)compatibility regimes. On average, there are seven percentage points fewer public servants in parliaments where a strict regime is in force. Supplementary evidence based on IV estimations shows that the fraction of public servants in parliament is positively correlated with government consumption, but not correlated with government effectiveness.     

WHAT DO CITIZENS THINK ABOUT PUBLIC ENTERPRISES? SUBJECTIVE SURVEY DATA ON THE LEGITIMACY OF THE ECONOMIC ACTIVITIES OF THE GERMAN PUBLIC SECTOR

We analyse the legitimacy of public enterprises that perform economic activities by focusing on the citizens’ subjective preferences, i.e. determining their political legitimacy. Using data from a representative survey conducted among 318 citizens of the German state of Rhineland‐Palatine, we explore determinants for the support of either privatisation efforts or the instrumental thesis, a widespread principle in German‐speaking countries, which considers public enterprises solely as instruments to fulfil economic policy objectives. Our results indicate that the respondents’ perception of the efficiency of public enterprises as well as their personal economic situation are important factors for the support of privatisation. The influential factors for the use of public enterprises as policy instruments are political ideology, the perception of a higher security of supplying goods and services as well as opinions regarding corporate social responsibility. The subjective preferences of a (democratic) country's citizens are thus an important reason why the public sector should or should not play an active part in providing goods and services. This can play an important role when decision makers from the public sector are keen to take into account the citizens’ approval or disapproval of privatisation measures.     

中国国有企业发展前景——创新政治经济学视角

透过创新政治经济学的视角,我们可以发现,国有企业的体制有可能具有促进动态规模效益的相对效率特性。国有企业始终是中国追求以创新体制为基础的发展道路所能凭借的基本力量,而是否走上这条道路却又是国有企业走向消亡抑或新生的关键。     

Does Inter‐jurisdictional Competition Engender a “Race to the Bottom”? A Meta‐Regression Analysis

A growing literature documents the existence of strategic political reactions to public expenditure between rival jurisdictions. These interactions can potentially create a downward expenditure spiral (“race to the bottom”) or a rising expenditure spiral (“race to the top”). However, in the course of identifying the existence of such interactions and ascertaining their underlying triggers, the empirical evidence has produced markedly heterogeneous findings. Most of this heterogeneity can be traced back to study design and institutional differences. This article contributes to the literature by applying meta‐regression analysis to quantify the magnitude of strategic inter‐jurisdictional expenditure interactions, controlling for study, and institutional characteristics. We find several robust results beyond confirming that jurisdictions do engage in strategic expenditure interactions, namely that strategic interactions: (i) are weakening over time, (ii) are stronger among municipalities than among higher levels of government, and (iii) appear to be more influenced from tax competition than yardstick competition, with capital controls and fiscal decentralization shaping the magnitude of fiscal interactions.     

Industry and Labour: Class Struggle at Work and Monopoly Capitalism; Social Standing in America: New Dimensions of Class; Class Structure and Social Mobility in Poland

A very well-established economic literature maintains that state-owned enterprises (SOEs) are inefficient as compared to privately owned ones (POEs). In this paper, I argue that SOEs' inefficiency is not due to state ownership per se, but is rather caused conditions other than ownership, to which SOEs often — though not necessarily always — relate. In particular, I focus on dynamic efficiency — specifically, the production of technological innovation — of SOEs in manufacturing industries, where SOEs should contend with POEs in a competitive environment. I suggest that targeted measures, which are aimed at increasing managers' commitment to long-term investment strategies and at reducing corruption and political interference — albeit complex and difficult to implement — can be much more (positively) impactful on long-run technical progress than the simple privatization of companies. This leaves room for exploration and implementation of policies that might reconcile state ownership and market competition in industrial sectors.     

央企高管的职业生涯关注与投资效率*——来自反腐风暴背景下的经验证据

投资效率低下是央企代理问题的一个突出表现。本文以2003-2014年间央企上市公司作为研究对象，探讨了：（1）央企高管职业生涯关注激励对央企投资效率的影响；（2）国家层面的外部监督能否对激励形成替代，缓解非效率投资行为。本文研究发现：央企高管的职业生涯关注激励减弱时，投资效率降低；反腐风暴削弱了激励减弱时的投资过度，但加剧了投资不足。本文对央企高管激励减弱时投资过度与投资不足的形成机理进行分析，为完善央企公司治理、平衡央企激励机制提供参考。     

LINKING TWO WORLDS? ENTREPRENEURIAL ORIENTATION IN PUBLIC ENTERPRISES: A SYSTEMATIC REVIEW AND RESEARCH AGENDA

Contemporary public enterprises differ from their forebears. Today, they are more similar to private enterprises, receiving far more attention than previously, when privatization processes all over the world were in the spotlight. Furthermore, the broad research stream of entrepreneurship has so far neglected the consideration of public enterprises. To set a future research agenda, the author examines the dispersed literature using an integrative and organizing framework to identify major topics and research findings. This paper reviews articles that investigate the entrepreneurship in contemporary public enterprises. Despite the growing scholarly interest globally, this systematic literature review indicates there is no more than a loose connection between the literature streams of public entrepreneurship and corporate entrepreneurship. Specifically, the review shows that the multidimensional concept of entrepreneurial orientation has thus far been ignored, although autonomy plays a significant role in the literature review, namely in the context of the interference of the public owner. It also reveals other essential research gaps, such as the development of a modern theory of public enterprises. The linked research stream of public‐sector corporate entrepreneurship offers a broad area of scholarly research and should encourage further investigation.     

中国国有企业改革：经验、困境与出路*

作为国有企业产权改革主要模式，“混合所有制”改革是否有助于确保国有资产保值增值，是否有助于推动中国经济可持续发展等问题仍存在探讨空间。本文基于对于改革开放以来中国国有企业改革的成就和教训的考察，指出“混合所有制”可以作为竞争性部门国有企业改革的一个过渡形式；对于垄断央企的改革应该充分借鉴国际上自然垄断行业的改革经验，打破行政垄断，推动竞争性框架建立，并切实实现从“管企业”逐步调整为“管资本”，通过改革实现国有资产的保值增值，并为经济创造新的增长点。     

CROSS‐MARKET TRADING IN CHINA'S LARGE STATE‐OWNED COMMERCIAL BANKS, 2006–2011

This paper examines the differential between the share prices of China's large state‐owned commercial banks traded in Shanghai versus prices observed in Hong Kong. We find a significant role for investor sentiment, as reflected in relative price‐earnings ratios, in explaining these price differentials for all four banks. The share price in Shanghai tends to move ahead of the share price in Hong Kong when more positive sentiment in Shanghai makes local investors willing to pay more for the same predicted earnings. We also identify common trends in relative bank price‐earnings ratios and price differentials across the two markets. (JEL G14, G15)