The role of state ownership and institutions in the innovation performance of emerging market enterprises: Evidence from China

Although it has been suggested that institutional context influences a firm's innovation performance, the role of regulatory institutions has been underexplored. Extending previous research, this study investigates whether and how regulatory institutions (i.e. state ownership, region-specific marketization and industry-specific institutional policy) affect innovation performance of emerging market enterprises (EMEs). Evidence derived from a large sample of Chinese manufacturing firms demonstrates that state ownership positively moderates the effect of R&D intensity on innovation performance. However, state ownership is not equally beneficial for all firms. Our analysis shows that region-specific marketization and industry-specific institutional policy enhance the innovation-enhancing effect of state ownership. By revealing the role of regulatory institutions, our study points to the importance of looking beyond firm boundaries to understand why EMEs are able to innovate despite their weak internal capabilities.     

Role of credit and monetary policy in determining asset prices: Evidence from emerging market economies

We examine the relative dominance of credit and monetary policy shocks in influencing asset prices in emerging markets. Estimates from panel VAR models for 22 EMEs provide evidence of a significant impact of bank credit on house prices in contrast to trivial impact on stock prices, possibly due to prudential regulations on banks’ exposure to stock markets. Contractionary monetary policy triggers sizeable and persistent decline in stock than housing prices as higher interest rates may render the funding of leverage costlier. Global shocks play an important role in explaining fluctuations in domestic stock prices rather than house prices since the latter class of asset is largely non-tradable across countries.     

Profit-sharing and financial performance in the Chinese state enterprises: Evidence from panel data

This paper examines the effects of incentives in employee remuneration on financial performance in a sample of Chinese state-owned enterprises (SOEs) during the late 1980s and early 1990s. The estimates show that bonus payments as a form of profit-sharing between employees and the state have positive effects on both the total factor productivity and profitability of the sample SOEs. Moreover, the actual level of bonus payments is found to be lower than the optimal level which a competitive firm would set to maximise profits. These results suggest that profit-sharing introduced in Chinese state-owned enterprises as one of the centrepieces of economic reforms over the last decade has been effective.We wish to thank participants at the Seventh Annual Conference of the Chinese Economic Association (UK) in December 1995 and an anonymous referee for comments. The paper has also benefited from the comments by participants at the STICERD Lunchtime Seminar, the London school of Economics. The financial support from ESRC (grant no. L324253025) is gratefully acknowledged.     

Determinants of commonality in liquidity: Evidence from an order-driven emerging market

Using an extensive, time-series, cross-sectional data-set of actively traded Indian stocks with up to 1.75 million firm-day observations, we discern the key determinants of commonality in liquidity among emerging markets. The paper shows evidence for both supply-side and demand-side factors contributing to liquidity commonality. However, the results are more supportive towards supply-side rationale for liquidity commonality among the firms where regulators and banks play an important source of commonality in liquidity, especially during market turmoil. Results are partially driven by the fact that the Indian stick exchange is an order-driven market. Economic activities like cheap exports and undervalued currency, rather than correlated trading by the institutional investors determine the demand for liquidity. These findings endorse the effect of high firm value, market return, liquidity, volatility, turnover, and alternate proxies of commonality in liquidity estimation.     

The effects of employee stock ownership on stock liquidity: Evidence from the Korean market

This study investigates the relationship between the level of employee stock ownership (ESO) and stock liquidity. Using Korean ESO data, we find that ESO is positively associated with various liquidity measures. Stock-owning employees tend to mitigate information asymmetry to increase their benefits from the transparent market. We also find stronger effects when the firm is not an affiliate of a chaebol family group, and is less monitored by financial analysts, foreign investors, and outside directors. Furthermore, we employ various robustness tests to mitigate potential endogeneity concerns.     

Post-privatization speed of state ownership relinquishment: Determinants and influence on firm performance

This study investigates the potential determinants of speed of state ownership relinquishment, measured by the annual decrease in the percentage of ownership by the government, as well as its impact on corporate performance. Several country- and firm-level determinants affecting the speed of the government ownership withdrawal are documented. Likewise, the initial positive relation between the speed of government ownership relinquishment and performance is reported. However, beyond a certain level, if the governments increase the annual percentage of ownership relinquishment, the performance could be inferior. In other words, a nonlinear relation with an inverted U-shape is detected.     

Performance management practices within emerging market multinational enterprises: the case of Brazilian multinationals

This study advances our understanding of HRM within emerging market multinational enterprises (EM-MNEs) by examining the extent to, and mechanisms by, which Brazilian MNEs standardise or localise their performance management (PM) policies and practices, and the factors that influence their design and implementation. We explored these issues through qualitative case studies of three Brazilian MNEs. The analysis of interview data reveals a strong tendency for Brazilian MNEs to centralise and standardise their PM policies and practices. The key finding of this paper is that PM practices within Brazilian MNEs are not based on indigenous Brazilian practices, but, rather, are heavily influenced by global best practices. The findings are at odds with previous research, which suggests that EM-MNEs apply different HR practices in developed country subsidiaries and developing country subsidiaries. Also, contrary to expectations, our results indicate that institutional distance does not have a significant influence on the adaptation of PM practices at subsidiary level.     

Central bank transparency and financial market expectations: The case of emerging markets

In this paper, we study how central bank transparency influences the formation of money market expectations in emerging markets. The sample covers 25 countries for the period from January 1998 to December 2009. We find, first, that transparency reduces the bias (the difference between the money market rate and the weighted expected target rate over the contract period) in money market expectations. The effect is larger for countries with no exchange rate peg and countries with low income. Second, an intermediate level of transparency is found to have the most favorable influence on money market expectations: neither complete secrecy nor complete transparency is optimal. Finally, all subcategories of the Eijffinger and Geraats (2006) index lead to a smaller bias in expectations, with political transparency having the largest effect.     

Ownership structure and firm performance in emerging markets: A comparative meta-analysis of East European EU member states,Russia and China

Using a total of 4425 estimates collected from 204 previous studies, this paper presents a meta-analysis performed to compare East European EU member states, Russia and China in terms of the relationship between ownership structure and firm performance. The results indicate that, as the standard theory predicts, state ownership negatively influences the performance of firms the state invests in, while the presence of domestic outside investors and foreign investors as company owners positively affects firm performance irrespective of the difference in country/region. Furthermore, we also found that ownership of managers tends to exert a positive impact on the performance of their owned firms. Overall, however, the linkage between corporate ownership and performance is weak. This finding implies that, in comparison with advanced economies, management discipline by investors is less sufficient in emerging markets.     

Inflation targeting and expectation anchoring: Evidence from developed and emerging market economies

Inflation expectations can be inferred from treasury yields data. Previous studies utilizing such data have found evidence for the role of inflation targeting in anchoring inflation expectations in a number of developed market economies. The goal of this paper is to extend the evidence for emerging market economies. We estimate inflation expectations from nominal treasury yields data and infer the anchoring of inflation expectations from the sensitivity of inflation expectations to current inflation rates. Our analysis shows that the effect of inflation targeting is statistically significant in emerging market economies as well as in developed market economies and that the magnitude is marginally greater in the former. Our results are robust to alternative specifications.     

The role of returnee executives in improving green innovation performance of Chinese manufacturing enterprises: Implications for sustainable development strategy

Environmental problems in China have attracted global attention. Grafting returnee executives' green resources to Chinese manufacturing enterprises is an effective way to solve China's sustainable development problems. This paper focuses on the impact of returnee executives and the heterogeneity of returnee and local executives on green innovation performance and the moderating effects of environmental regulation and managerial ties. The paper builds on data from 276 Chinese manufacturing enterprises. The results show that returnee executives tend to achieve sustainable development through green innovation. However, not all kinds of heterogeneity between returnee and local executives can promote green innovation performance. In addition, environmental regulation and managerial ties, as two important external moderation variables, have different impacts and different extents of impact on the relationship between returnee executives and four aspects (R&D, manufacturing, marketing, and management) of green innovation performance, that is, environmental regulation positively moderates the relationship between returnee executives and green manufacturing and management innovation performance but negatively moderates the relationship between returnee executives and green R&D and marketing innovation performance. These findings have clear management implications for Chinese manufacturing enterprises.     

Mixed ownership reforms and the transparency of nonstate-owned enterprises: Evidence from China

This paper takes Chinese Shanghai and Shenzhen A-share nonstate-owned listed companies from 2008 to 2019 as samples to study the impact and mechanism of state-owned capital participation on the transparency of nonstate-owned enterprises. The results show that state-owned capital participation has a significant positive impact on the transparency of nonstate-owned enterprises. In terms of the mechanism of action, state-owned capital participation positively impacts corporate transparency by increasing investors' attention. Further research finds that the positive effect of state-owned capital participation on foreign-funded enterprises and enterprises with few financing constraints is more prominent.     

Economic policy uncertainty and stock market sector time-varying spillover effect: Evidence from China

This paper investigates the volatility spillover effect among the Chinese economic policy uncertainty index, stock markets, gold and oil by employing the time-varying parameter vector autoregressive (TVP-VAR) model. Three main results are obtained. Firstly, the optional consumption, industry, public utility and financial sectors are systemically important during the sample period. Secondly, among the four policy uncertainties, the uncertainty of fiscal policy and trade policy contributes more to the spillover effect, while the uncertainty of monetary policy and exchange rate policy contributes less to the spillover effect. Thirdly, during COVID-19, oil spillovers from other sources dropped rapidly to a very low point, it also had a significant impact on the net volatility spillover of the stock market. This paper can provide policy implication for decision-makers and reasonable risk aversion methods for investors.     

Relationship of internal institutions,knowledge sharing,and technological innovation in characteristic cultural enterprises: Evidence from China

The paper empirically studies the relationship between internal institutions, knowledge sharing, and technological innovation based on the data of investigating 163 China's characteristic culture enterprises by applying structural equation model. The study shows that the internal institution of characteristic cultural enterprises can significantly enhance the knowledge sharing of employees in characteristic cultural enterprises; the knowledge sharing of employees will significantly enhance the technical innovation level of characteristic cultural enterprises; the internal institution of characteristic cultural enterprises does not directly and significantly improve the technical innovation level, but indirectly through enhancing the knowledge sharing of enterprise employees.     

Product co-development in an emerging market: The role of buyer-supplier compatibility and institutional environment

In emerging markets, supply chains increasingly serve as critical value chains through which ideas, practices and knowledge flow to and from suppliers and buyers. Drawing on buyer-supplier collaboration literature and organizational learning theory, we examine the antecedents and underlying mechanisms of product co-development. Due to emerging markets' unique institutional environments, we further investigate how government intervention and guanxi importance moderate supplier-buyer collaborative outcomes. Dyadic data from 323 supplier-buyer pairs in China largely support our theoretical framework. Partners' knowledge commonality has a curvilinear (inverted U-shaped) relationship to product co-development, whereas goal compatibility has a positive impact on product co-development. Mutual learning partially mediates the main effect. Furthermore, government intervention weakens the positive effect of mutual learning on product co-development whereas guanxi importance strengthens this relationship. This research provides fresh theoretical and managerial implications to supply chain collaboration in emerging markets.     

The role of complementary products on platform adoption: Evidence from the video console market

This paper studies the importance of the interdependences within platform-based markets. Specifically, the work examines the influence of complementary product portfolios on the adoption of platforms by individuals. The study analyzes data from a panel of 17 video game platforms in three regions (the US, Japan and Europe) for the period between 1989 and 2011. The results suggest that platform adoption is driven by the availability and users of complementary products. The study also finds that this impact is stronger when platform providers jointly manage the in-house complementary product portfolio and the platform. These findings reveal that decisions on complementary products act as strategic drivers of adoption in platform-based markets.     

制造企业员工绩效管理创新思考

制造企业的人力资源绩效管理是提升企业核心竞争力的重要手段,实施绩效管理对制造企业的发展有着非常重大的意义。文章剖析了我国制造企业人力资源绩效管理现状,对其当前的操作流程及其在具体的实施过程中存在的问题进行了分析,并提出了制造企业员工绩效管理的创新思考对策。     

The influence of lock-up provisions on IPO initial returns: Evidence from an emerging market

A lock-up agreement ensures that major shareholders retain significant economic interest in the companies following the IPOs. Rationally, these insiders will not adhere to the lock-up agreement unless the benefits of doing so can more than offset the costs. Therefore, in an environment characterized by high information asymmetry, a lock-up agreement can serve as an effective mechanism to signal the risk or quality of firms. This article examines whether the lock-up ratio and lock-up period affect the initial returns, using a sample of 384 IPOs listed on Bursa Malaysia between 2000 and 2012. The results of the cross-sectional multiple regression show that the lock-up period is significantly positive in explaining IPO initial returns, but the lock-up ratio is not. The findings provide new insights for testing the signaling content of lock-up provisions, particularly in a setting characterized by high information asymmetry.     

The outbreak of COVID-19 and stock market liquidity: Evidence from emerging and developed equity markets

The outbreak of the novel corona virus has heightened concerns surrounding the adverse financial effects of the outbreak on stock market liquidity and economic policies. This paper contributes to the emerging strand of studies examining the adverse effects of the virus on varied aspect of global markets. The paper examines the causality and co-movements between COVID-19 and the aggregate stock market liquidity of China, Australia and the G7 countries (Canada, France, Italy, Japan, Germany, the UK and the US), using daily three liquidity proxies (Amihud, Spread and Traded Value) over the period December 2019 to July 2020. Our empirical analysis encompasses wavelet coherence and phase-differences as well as a linear Granger causality test. Linear causality test results suggest that a causal relationship exists between the number of cases of COVID 19 infections and stock market liquidity. To quantitatively examine the degree of causality between COVID-19 outbreak and stock market liquidity, we employ the continuous wavelet coherence approach with results revealing the unprecedented impact of COVID-19 on stock market liquidity during the low frequency bands for countries that were hard hit with the COVID-19 outbreak, i.e., Italy, Germany, France, the UK and the US. Further, evidence shows that there is a heterogeneous lead-lag nexus across scales for the entire period of the study.     

The relationship between R&D,innovation and productivity in emerging economies: CDM model and alternatives

CDM (Crépon, Duguet and Mairesse, 1988) is a workhorse model in the economics of innovation, which explains productivity in a three-stage procedure driven initially by R&D and leads to patents and then to productivity improvements. Based on the logic of this model, an increasing number of papers applies it to emerging economies but modifies the original model without being explicit about the nature and implications of this modification. We argue in this paper that, in its original form, CDM does not capture stylized facts of the determinants of productivity in emerging economies and that we need alternative models. Accordingly, we are critical of papers that try to maintain the validity of the model but actually change it. For that purpose, we test the original CDM model and its two alternatives: investment and production capability–driven models. Our research is based on a large sample of firms in Central and Eastern Europe, former Soviet republics and Turkey, and we show that the alternative models are much closer to the stylized facts of innovation activities and technology upgrading in these and other emerging economies. Our conclusions have important policy implications, which we discuss.