Does the mixed ownership reform work? Influence of board chair on performance of state-owned enterprises

By Jian Guan, Zhimin Gao, Justin Tan, Weizheng Sun, Fan Shi. 2021

111 citations recorded by the source corpus.

Abstract By introducing diversity of ownership interests via “mixed-ownership reform”, China seeks to alleviate internal governance problems in state-owned enterprises (SOEs), enhancing their efficiency and competitiveness. Private strategic partners invest for a large minority stake, with government typically retaining a majority share and influence. Resulting questions related to strategic leadership and corporate governance, addressed in this paper from the perspective of principal-agent theory, include: To what extent do the board chairs of SOEs affect their financial performance? How is this relationship impacted by the institutional changes induced by mixed-ownership reform? Do these effects vary between SOEs operating in competitive and monopolistic industries? Analyzing data on Shanghai- and Shenzhen-listed SOEs from 2008 to 2017 using the multilevel linear model (MLM) method, we determine that board chairs have a noticeable effect on financial performance, varying by type of SOE, and that mixed-ownership reform reduces their impact.

Subfields: Accounting, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/9e97f09576727fff5529c365c597e1bc1857f032