Chinese Corporate Research Articles

The European Union’s Soft Economic Power Assessment: A Comparative Analysis

Soft economic power is related to subjective perceptions of attractiveness, justice, and success of an economic system and economic policy. The current state of the European Union soft power relatively to other global economic powers is analyzed with several approaches: opinion polls, objective indicators, value estimates, and infometric method. They prove either the supremacy of the EU or second best result after the US. Positive contribution to the EU soft power is provided by its development level, quality of life, national and corporate brands, business regulation, environmental protection priorities, economic freedoms, integration initiatives, development assistance, tourism, creative industries, education, science, culture, and healthcare. The main challenges for the EU image is slower economic growth and a domination of American and Chinese corporate brands in media, technological, and banking sectors.

중국의 임시중재제도에 관한 연구

This study presents matters to be noted for Korean parties who want to use ad hoc arbitration system through a study on Chinese ad hoc arbitration system. This study comparatively analyzed Chinese laws, regulations, judicial interpretations and cases related to the ad hoc arbitration system. Although China does not permit ad hoc arbitration by law, it does allow the use of ad hoc arbitration for disputes under some special circumstances, such as disputes between companies located in Free Trade Zones. In international commercial arbitration, ad hoc arbitration can be used when the parties have stipulated a law other than Chinese law as the governing law for the arbitration agreement, or have stipulated a place other than China as the arbitration place without stipulating a governing law for the arbitration agreement. When a Korean parties intend to resolve a dispute with Chinese parties through ad hoc arbitration, the following should be noted. First, in the ad hoc arbitration agreement, the governing law for the arbitration agreement or the place of arbitration must be stipulated in a law and place other than China. Second, since domestic investment companies located in China Free Trade Zones are Chinese corporations, ad hoc arbitration should not be used for transactions with Chinese companies without an international element.

A theory of dialectical transnational historical materialism for China’s state capitalism and the China–US rivalry

A new cold war seems to be looming between China and the United States. The escalating China–US rivalry calls for a more dialectical theory of international political economy that captures conflict and disintegration as an integral part of capitalist globalisation. Kees van der Pijl’s and William Carroll’s critical realist approach towards the study of transnational corporations (TNCs) and transnational capitalist class (TCC) formation has incorporated the classical theory of uneven capitalist development and inter-imperialist rivalry into the scholarship of transnational historical materialism, which I argue is apt for explaining the China–US conflict: One is positioned as a Hobbesian contender and the other as the Lockean hegemon. To provide empirical grounding for my argument, I conduct a corporate network study to examine the interlocking directorates of 40 Chinese TNCs. In concordance with Carroll and colleagues’ studies, I find that the globalisation of Chinese TNCs and Chinese corporate elite has been modest and has not undermined or replaced the national base, nor does it signify a homogeneous TCC formation. My findings have also revealed an inextricable relationship between the Chinese TNCs and China’s party-state, or a Hobbesian character of state-organised capitalism.

Research on the Influence Mechanism of Chinese Corporate Governance and Accounting Information Quality

Ownership and management rights are gradually separated in the process of the development of modern enterprises, and the modern financial and accounting system comes into being. Accounting information system is an indispensable part of modern enterprises, corporate governance structure will be organically combined within the enterprise, the two influence each other and interact with each other. True, reliable and efficient accounting information system can fully improve the operational efficiency of the company, and the structure of corporate governance is effectively optimized. On the contrary, the accounting information system of fraud and information distortion is very likely to make the operators seek improper interests, make the stakeholders bear huge losses, and the financial situation of the company deteriorate.

Networking of corporate universities in knowledge management: evidence from China

PurposeA corporate university is a knowledge management institution established within an enterprise. The purpose of this paper is to investigate the evolution of knowledge activities of corporate university and their relationship, particularly the role of networking in the knowledge management.Design/methodology/approachHaier, which had the earliest Chinese corporate university in the science and technology manufacturing industry, was employed as a case study. Data were collected by interviews and through consulting the documents of Haier’s corporate university. Grounded theory was used for data analysis.FindingsThe paper finds that corporate universities are engaged in three kinds of activities, namely, enterprise operational knowledge transfer, networking activities and scientific and technological activities. There is a dynamic circular relationship among these three kinds of activities, which form a “figure of eight” cycle model. Networking activities are the hub between enterprise operational knowledge transfer and scientific and technological activities. There is a two-way integration of enterprise operational knowledge transfer and science and technological activities via networking activities. Networking activities, thus, play a key role in the development of corporate universities into knowledge management centers. The scope of the key activities of corporate universities is dynamic and expanding. The double circulation effect among key activities in corporate universities has strengthened over time.Originality/valueBy investigating the dynamic nature of the activities of corporate universities, particularly the role of networking in knowledge management, this research enriches the study of the knowledge management of corporate universities.

Impact of Chinese corporate social responsibility on purchase intention: Insights from traditional Chinese culture

Consumers' perception of corporate social responsibility (CSR) varies in different cultural contexts. We examined whether and to what extent Confucianism, as a Chinese traditional cultural setting, can be applied as a sound foundation of CSR activities. We first constructed the Chinese CSR model, then explored the impact mechanism of Chinese CSR on consumers' purchase intention. Participants were 415 Chinese consumers who completed the measures. This study yielded the following results: First, consumer–corporate identity partially mediated the relationship between perceived Chinese CSR and consumers' purchase intention. Cultural identity not only strengthened the relationship between perceived Chinese CSR and purchase intention, but also moderated the mediating effect. We have provided a framework that directs management attention to Chinese CSR elements and practices in the traditional Confucian culture context, both strategically and operationally.

The relevance of bilateral political relations between countries for the completion stage premium of cross-border mergers and acquisitions

PurposeThe purpose of this paper is to examine the influence of bilateral political relations on the completion stage premium of cross-border mergers and acquisitions(CSPCMA) and the moderating roles of cultural distance, trade openness and the nature of firm ownership for this relationship.Design/methodology/approachBased on a sample of 401 cross-border mergers and acquisitions (M&A) conducted by Chinese companies from 1995 to 2019 in the Statistical Data Center (SDC), this article used weighted least squares (WLS) to empirically test the impact of bilateral political relations between countries on the CSPCMA.FindingsThe better the target country of entry’s bilateral political relations with China, the lower the premium of the transaction price paid by Chinese companies at the completion stage of cross-border M&A. Among the moderators, the study found cultural distance positively moderates the relationship between bilateral political relations between countries and CSPCMA. The degree of trade openness of the target country negatively moderates the relationship between bilateral political relations between countries and CSPCMA. The negative relationship between bilateral political relations between countries and CSPCMA is stronger when the acquirer is a state-owned enterprise (SOE).Originality/valueThe findings of this study not only add to the knowledge about the relationship between bilateral political relations and corporate cross-border M&A premiums, but also have managerial implications for Chinese corporate managers to sustainably reduce corporate cross-border M&A premiums.

Can financial factors affect corporate debt leverage convergence?

This study examines the individual and macro financial factors affecting Chinese corporations' debt leverage convergence. Based on the nonlinear time-varying factor model, this study tests the convergence of the debt leverage of Chinese A-share non-financial listed companies from 1998 to 2017, and obtains two company groups, big club and non-big club. Further study tests the influence of financial factors on Chinese corporations' debt leverage convergence. Internal funds (total return on assets, free cash flow, cash holding, cash dividend payment) and monetary policy are taken as the agent variables of individual and macro financial factors, respectively. The results show that companies lacking internal funds are more likely to converge to big club than those that have sufficient internal funds, and the debt leverage convergence of companies in big club is significantly affected by monetary policy compared with those in non-big club. This study shows that the impact of China's monetary policy on the trend of corporate debt leverage is heterogeneous. Structural adjustments must be made to its current monetary policy to maintain reasonable corporate leverage and control debt risks.

Pricing like things alike: The role of financial statement comparability in bond pricing

Using a modified financial statement comparability measure and data from the Chinese corporate bond market, this paper investigates the role of firm-pair financial statement comparability in bond pricing. Following the notion that financial statement comparability should be an ideal clue to screen benchmarks, we predict that, in the book-building stage, institutional investors tend to benchmark the bond in question to bonds issued by informationally comparable firms to make their quotes of interest rates. The empirical results show that the issue spread of a new bond is convergent to the yield spread of the bonds issued by comparable firms. This phenomenon is more pronounced when the issuing firm has no listed bond to act as a reference and when the comparable firm is covered by more analysts. Further analysis in the secondary market shows that the spreads of two bonds issued by two accounting comparable firms are not only convergent but also highly correlated. Our study provides a better understanding of how a corporate bond is priced and highlights the value of financial statement comparability to bond investors.

Institutional Investors in China: Corporate Governance and Policy Channeling in the Market Within the State

The extraordinary rise of China’s economy has made understanding Chinese corporate governance an issue of global importance. A rich literature has developed analyzing the Chinese Communist Party’s (CCP) role as China’s largest controlling shareholder and the impact that this has on Chinese corporate governance. However, the CCP’s role as the architect—and direct and indirect controller—of institutional investors in China has been largely overlooked in the legal literature. This Article aims to take the first step in filling this gap in the literature by drawing on Chinese sources and fresh hand-collected empirical, interview, and case study evidence to analyze the meteoric rise of institutional investors in China. It provides a taxonomy of institutional investors in China and reveals how the market for institutional investors has grown and has become increasingly “atomized” as different types of institutional investors have proliferated. The Article reveals how the CCP has actively and gradually promoted the growth of domestic institutional investors, in terms of types and size, through the relaxation of policies and law reforms to improve corporate governance and stabilize the stock market, while limiting the influence of foreign institutional investors. It further analyzes all the Activist Campaigns undertaken by institutional investors in China and maps the network of government bodies, regulations, and tactics that the CCP has developed to directly and indirectly control State-Owned Institutional Investors (SOIIs) and Private-Owned Institutional Investors (POIIs) for the purpose of policy channeling. This Article concludes by taking a step back and briefly considering what this examination of institutional investors tells us about China’s unique form of capitalism and system of corporate governance. It suggests that the rise of institutional investors in China has been strategically developed in a way to reinforce the CCP’s ultimate control over the financial system. However, contrary to what some conceptions of “state capitalism” may suggest, the CCP does not micro-manage institutional investors on a day-to-day basis. Rather, institutional investors normally function according to free-market forces and increasingly perform an important corporate governance role—with the CCP using its policy channeling in a targeted way to stabilize the market in times of crisis, execute important legal and market reforms, and to maintain calm in society during critical political events: what this Article termed as the “market within the state” for institutional investors in China.

An examination of the relationship between implicit taxes and market structure: Evidence from Chinese listed companies

ABSTRACT An implicit tax is a reduction in the pre-tax rate of return driven by tax preferences on an investment. The extant research demonstrates existence of implicit taxes at corporate level, but prior studies have drawbacks in tax preferences measure. This study takes the unique advantage of Chinese corporate tax rate preference setting to address research method problems. By employing the propensity score matching and multivariate regression analysis, we demonstrate the existence of implicit taxes in Chinese listed firms and the market structure impedes the realisation of implicit taxes. The market power and market concentration reduce the negative effect of tax preferences on the firm’s pre-tax rate of return.

Social Networks, Social Responsibility, and Sustainable Development of Chinese Corporations in Africa

Based on the questionnaire data and the qualitative data obtained in two field surveys in Zimbabwe in 2018 and 2019, this study examined local people’s attitudes towards Chinese corporations. Focusing on locals’ impressions of Chinese corporations and their willingness to support the sustainable development of Chinese corporations as dependent variables, and using demographic statistics, social networks, and social responsibility as independent variables, we applied multiple linear regression analysis to explore the effect of Chinese corporations’ social networks and social responsibility on their sustainability. The findings showed that social networks overall help to enhance locals’ impressions of Chinese corporations, but social networks have no positive impact on local communities’ willingness to support more Chinese corporations. In contrast, corporate social responsibility clearly has a much greater impact on the capability of the corporation to gain support from local communities for its sustainable development. This study speaks to the need for a scholarly investigation of China–Africa links as a global hotspot issue and provides a reference value for Chinese or other corporations for how to handle the relationship with local communities.

The uneven geography of real estate investment by Mainland Chinese state-owned and private enterprises in the U.S.: Local market conditions, migration, and ethnic networks

Since the 2010s, foreign direct investment in real estate (FDIRE) by Mainland Chinese firms has emerged as a major force within global real estate markets, challenging Western investors’ traditional dominance. It is unclear, however, whether Mainland Chinese FDIRE is fueled by the same motivations as those of investors from advanced economies, which to date have represented both the primary investors and main objects of study. One major difference may be that Mainland Chinese investment originates in an institutional environment comprised of strong state intervention and social networks important for fostering business and ethnic ties. To uncover the potentially unique determinants and heterogeneity of Mainland Chinese corporate real estate investors, we build and analyze a state-level panel dataset of Mainland Chinese FDIRE by state-owned enterprises and private enterprises in the U.S. from 2010 to 2017. Our empirical results reveal the importance of Chinese migrants in promoting Mainland Chinese real estate investment, especially by private enterprises. Our findings also demonstrate that at the state level, Mainland Chinese FDIRE exhibits few agglomerative tendencies.

Specific features and procpects for development of electronic government in the PRC at the beginning of the XXI century

The article is devoted to the analysis of features of functioning of the digital government in the Chinese State in the first decades of the 21-st century and the perspectives of its further development. In this work the authors give a brief description of the essence of phenomenon of digital government in general. The article explores the specific features of this process in the People’s Republic of China in the third millennium (taking into account the background of this issue). This research examines the influence of functioning of e-government bodies in Сhina on the internal political situation in the country – taking into account such aspects as building a dialogue between authorities and society, perfection of the public service system providing the Chinese citizens with essential public goods, the merits and the demerits of China’s online government are taken into account. This article examines such significant factors in the development of e-government in China as the impact of the global situation at the present stage on international politics and the country’s information security system. This article analyzes the features of the relationship between the Chinese authorities and media corporations operating on the Internet market of the Middle Kingdom (such as, for example, Google), and studies the reasons for the contradictions between them. The study also comprehended strategy of the authorities of the People’s Republic of China in matters of information security of the state, including the active use of Chinese hackers in network conflicts with Western countries, and the actions of special units of the Chinese armed forces created to counter foreign cyber terrorism.

The Intra-Regional Spillover Effect of Bond Defaults: Evidence from the Chinese Corporate Debt Market

The Intra-Regional Spillover Effect of Bond Defaults: Evidence from the Chinese Corporate Debt Market

How does political uncertainty affect Chinese corporate M&A abroad Evidence from the BRI scenario

How does political uncertainty affect Chinese corporate M&A abroad Evidence from the BRI scenario

The Effect of the U.S.–China Trade War on Chinese Corporate Innovation: A Curse or a Blessing?

The Effect of the U.S.–China Trade War on Chinese Corporate Innovation: A Curse or a Blessing?

The Effect of the U.S.–China Trade War on Chinese Corporate Innovation: A Curse or a Blessing?

The Effect of the U.S.–China Trade War on Chinese Corporate Innovation: A Curse or a Blessing?

기업 경영성과에 대한 조직문화 및 정보흡수능력의 조절효과 분석

Based on the traditional Chinese entrepreneurship, Guanxi culture, as a type of networking, this study analyzed the external network effects of Chinese corporate managers and studied whether there is a moderating effect of organizational culture and information absorption capacity. This study analyzed the organizational culture (agreement culture, development culture, rational culture, hierarchical culture) and information absorption capacity (acquisition capacity, utilization capacity) of Chinese companies as moderating effects. As a result of conducting a survey on Chinese companies, a total of 294 effective samples were secured. Summarizing these analysis results, it was found that organizational culture had a significant positive (+) effect as a moderating effect between CEO characteristics and external networks. It was found that information absorption capacity has a moderating effect between CEO characteristics and external networks and has a significant positive (+) effect.

Blockholders, tradability and information asymmetry: Evidence from Chinese listed firms

In this paper, we conduct an extensive empirical study on the relationship between block ownership and information asymmetry based on the split-share structure of Chinese corporate ownership. Unlike prior studies, we find that a blockholder with a propensity to trade can reduce information asymmetry. This information asymmetry reduction does not take place through increased information aggregation by tradable blockholders. Rather, credible exit threats by tradable blockholders help reduce information asymmetry through instilling discipline in management and enhancing transparency in information disclosures. We further show that the cost of exit threats by tradable blockholders can explain the different findings from prior studies. These results remain robust to the possible confounding effect of tradable block ownership as shown by the difference-in-differences analysis of the split-share structure reform, which serves as an exogenous shock to tradable block shares.