Chinese State-owned Enterprises Research Articles

Drifting towards multidimensional collaborative innovation: the co-evolution of collaboration networks and policy in China’s nuclear power industry

Purpose Nuclear power is a stable and reliable energy source that can improve energy structure while reducing carbon emissions, which is of great significance for environmental protection and combating climate change. As a unique industry, it is facing rare development opportunities in China and has broad market prospects. However, the characteristics of technical difficulty, loose organizational structure and uneven regional distribution limit the expansion of the nuclear power industry. This paper aims to a better understanding of the accumulation process for innovation capability from the perspective of network evolution and provides policy guidance for the market development of the nuclear power industry (NPI). Design/methodology/approach Methodologically, social network analysis is used to explore the co-evolution of multidimensional collaboration networks. First, the development and policy evolution of the NPI is introduced to divide the evolution periods. Then, the authors identify and analyze the core organizations, technologies and regions that promote nuclear power patent collaboration. Furthermore, three levels of collaboration networks based on organizations, technologies and regions are constructed to analyze the coevolution of patent networks in China’s NPI. Findings The results show that nuclear power enterprises always play the foremost role in the organizational collaboration network (OCN), and the dominance of foreign enterprises is replaced by Chinese state-owned enterprises in the third period. The technology hotspot has shifted from nuclear power plant construction to the control system. The regional collaboration network was initially formed in the coastal areas and gradually moved inland, with Guangdong and Beijing becoming the two cores of the network. The scale of three collaboration networks is still expanding but the speed has slowed down. Originality/value In response to the pain points of the NPI, this research focuses on multidimensional collaborative innovation, investigates the dynamic evolution process of collaborative innovation networks in China’s NPI and links policy evolution with network evolution creatively. The ultimate result not only helps nuclear power enterprises integrate innovative resources in complex environments but also promotes industrial upgrading and market development.

The influence of non-state-owned shareholder governance on the governance level of state-owned enterprises--Based on the perspective of board resolution behavior and party organization governance.

With an increasing number of heterogeneous shareholders participating in corporate governance in reality, the assumption of shareholder homogeneity in agency theory is gradually relaxing in the modern field of corporate governance. The policy of mixed ownership reform in China provides empirical evidence for studying heterogeneous shareholder governance. To fully understand the governance effects of non-state shareholders, we employ the ownership proportion held by non-state shareholders among the top ten shareholders and the appointment of directors as measures for non-state shareholder governance. Using a panel fixed-effect model from the perspective of state-owned enterprises (SOEs) party organizations, we examine the impact of non-state shareholder governance on the governance level of SOEs. The study reveals that non-state shareholder governance positively affects the governance level of SOEs, with board resolutions playing a crucial role in this relationship. When party members serve as directors, the governance effect of non-state shareholders is more significant. Based on the aforementioned research findings, we recommend further refining corporate governance measures for SOEs within the context of SOE reforms. It is advisable to optimize the party organizational governance structure and leverage the synergistic effects of non-state shareholder governance and party organizational governance. Advancing reforms along the Pareto improvement path will contribute to establishing a distinctive corporate governance system for Chinese SOEs.

Construction of "De-Capacity Reduction" financial performance index for Chinese coal industry enterprises ——based on Fisher discriminant analysis

In February 2016, the Chinese government focused on removing excess capacity in coal industry enterprises, and the research goal of the paper was to determine how much impact this will have on the financial performance of coal industry enterprises. The paper collected the financial performance indicators of Chinese state-owned coal industry enterprises from 2011 to 2021, and discriminant analysis was used to calculate the financial performance index evaluation system. The conclusions are: (1) From 2011 to 2016, the financial performance index of Chinese state-owned coal industry enterprises before De-Capacity continued to decline, from 2.062 in 2011 to 1.639 in 2016; In 2017–2021, the financial performance index of Chinese state-owned coal industry enterprises after De-Capacity continued to rise, from 1.482 in 2017 to 1.515 in 2021. (2) From 2011 to 2020, the cumulative financial performance index for the whole trade of state-owned coal industry in the past decade was 18.340, with state-owned large coal industry enterprises having the best financial performance, with a 10-year cumulative index of 20.618, followed by state-owned medium-sized coal industry enterprises, with a 10-year cumulative index of 17.944, and the worst among state-owned small coal industry enterprises, with a 10-year cumulative index of 17.271. (3) If the market adjustment started in 2012 is also considered as a component of "De-Capacity", two pressures from the market and the government have prompted the transformation of state-owned coal industry enterprises. The industry wide financial performance index has increased from 1.554 in 2012 to 1.559 in 2020, with an average annual increase of 0.04 %.

Roads to nowhere but the belt is Gucci: has China’s Belt and Road Initiative been successful so far and why?

This article assesses the success of China’s Belt and Road Initiative (BRI) with respect to three objectives: strengthening China’s geopolitical stance, spurring geo-economic development in the Western regions and instilling a spatial fix to overaccumulation and thirdly, providing profit opportunities to troubled state-owned enterprises. I find that the BRI has only delivered on the third aspect, with even the BRI’s signature white elephant projects providing windfall incomes to the state-owned enterprises (SOEs) constructing and operating them. My explanation of this phenomenon is two-fold. Firstly, I argue that tense, coercive competition (Crotty, 1993) has spurred Chinese SOEs to revert to rent-seeking activity in order to stay afloat and realise managers’ cadre ambitions. As the state-owned Asset Supervision and Administrative Council (SASAC) evaluates manager performance based largely on company performance, demanding numbers that cannot be achieved under coercive competition in an environment of overcapacity, managers reverted to guanxi practices and corruption to secure under-the-counter deals, relying on soft budgets and beneficial lending practices. Amid tightening domestic regulation and Xi’s anti-corruption campaign, these strategies are becoming less viable and sustainable to pursue at home. As managers’ incentive structure has not evolved, pressure to seek rents persists, pushing SOEs to pursue their strategies abroad via the BRI. Secondly, the export of the strategies to persist amid coercive competition is enabled by a fragmented institutional environment, allowing SOEs to abuse asymmetries in information and outmanoeuvre stringent evaluation of their proposed BRI projects by mobilising political support through networks.

Emerging market multinationals’ embeddedness in Global South countries: an empirical study of Chinese MNEs in Peru

Purpose This paper aims to investigate how emerging market multinational enterprises (EMNEs) are integrating and expanding into other emerging market host countries, focusing on Chinese mining companies in Peru. Design/methodology/approach Adopting a qualitative approach, an in-depth analysis of two Chinese state-owned enterprises’ strategies was conducted, building on stakeholder theory and the business ecosystem perspective. Findings This study reveals a reliance on high-level political lobbying rather than localized engagement strategies. However, findings point to increasing grassroots resistance among local stakeholders, undermining EMNEs’ bargaining power. Originality/value This paper argues for a paradigm shift toward inclusive, cooperative “translocal governance” approaches as empowered communities gain voice. Key contributions include advancing theoretical understanding of changing stakeholder relationships and power configurations in emerging countries, underscoring the rising significance of microlevel sociocultural embeddedness for MNE success and highlighting practical imperatives for EMNEs to embark on rapid localization strategies in Latin America. By elucidating multilayered integration realities in Peru, this interdisciplinary study yields contextualized insights and enriches perspective on the conditions and pathways for EMNEs to build sustainability in Global South emerging market environments.

Effective Performance Climate for State-Owned Enterprises: A Case Study of BEI’s Performance Management System

Using BEI’s performance management system as a case study, this study investigates the creation of an efficient performance environment within the context of a state-owned enterprise in China. The company utilizes goal orientation and skills, competence, and knowledge orientation as primary components, underlining the importance of tracking and managing the performance process. This optimizes the application of performance outcomes, transforming employees' generalized knowledge, skills, and abilities (KSAs) into specific KSAs. This ensures a consistent performance climate with the strategy and thus improves organizational performance. Additionally, technical term abbreviations are explained upon first use. Focusing on KSAs and creating a performance climate that aligns with the strategy is necessary to improve organizational performance. This study outlines the implementation of a goal-oriented performance appraisal process and a corresponding performance appraisal system based on KSAs. Through a case study of BEI's performance management system, the research demonstrates its beneficial effect on corporate performance and thoroughly investigates its characteristic features, including legitimacy, effectiveness, relevance, fairness, and content environment. The study outlines the practical and enlightening effects of implementing an appropriate performance climate that aligns with Chinese state-owned enterprises’ cultural values. It also emphasizes the need for diverse organizations and industries to perform climate models that cater to their unique needs.

Examining shifts in the Angola–China relations in the post-Dos Santos era

Abstract The Angola–China connection has famously been branded a ‘marriage of convenience’—an ‘uneasy alliance’ forged for pragmatic reasons at an opportune time of mutual need. In this article, we document how the relationship has more recently undergone a marital burnout of sorts. Chinese loans to Angola have dried up and most Chinese state-owned enterprises have left, as have 90 percent of Chinese migrants. The legacy of this marriage is somewhat mixed. Much of the infrastructure left behind is of dubious quality, while servicing the Chinese debt incurred to finance these projects may consume up to 10 percent of Angola’s GDP. Drawing on three rounds of fieldwork in Angola and over 60 interviews, we trace the souring of Angola–China ties to three concomitant factors: (i) Angolan internal politics; (ii) Chinese reconfiguration; and (iii) exogenous shifts in the global economy. In doing so, we argue that China and Angola are entering new territory, and that this shift in both parties’ calculations can be usefully illuminated by the concept of ‘strategies of extraversion’. Angola’s elites have once again proven that they are adept at transforming external constraints—this time related to China’s increasing financial caution and domestic recalibration—into new opportunities.

The role of industrial clustering: from layoff to self-employment after the Chinese state-owned enterprise reform

ABSTRACT It is generally agreed upon that industrial clustering can stimulate the formation of new businesses. However, the role of industrial clustering in the transition from layoff to self-employment is rarely investigated. This study exploits the Chinese State-Owned Enterprise Reform as a policy shock to employment, for examining whether laid-off workers are more inclined to be self-employed in regions with highly developed industrial clustering. The empirical results first reveal that prefectures with a higher SOE workers ratio in 1995 experienced a larger increase in the new entry of self-employed households in the following years. Following that, we further detect the heterogeneous effect of regions with and without clusters. The results illustrate that the reform increased the number of new self-employed households in regions with industrial clusters, and the effect is insignificant in prefectures without industrial clusters. This study implies adopting a cluster-based development strategy in transitioning countries could alleviate the negative effect of mass unemployment.

Building the Road Ahead

Chinese state-owned enterprises (SOEs) are the primary implementers of China’s Belt and Road Initiative (BRI). This article identifies three trends in Chinese SOEs’ development of overseas infrastructure through the BRI. Specifically, they are diversifying project models, pursuing more small and medium-sized projects, and partnering with new international actors. It also considers the implications of these shifts for Chinese SOEs and host countries.

Financial Impact Analysis of the Restructuring and Listing of State-Owned Enterprises

In the rapidly evolving economic landscape, State-Owned Enterprises (SOEs) stand as prominent pillars, with their restructuring and listing being pivotal to both their development and the broader economic progression. This study delves into the financial impacts of restructuring and listing on three prominent Chinese SOEs: CNPC Capital, China Energy Construction, and China Communications Construction. The findings reveal significant growth in assets and liabilities, with a noticeable uptrend in net profits for all entities post-restructuring. The year-end cash balances exhibited a consistent upward trajectory, suggesting enhanced liquidity and operational efficiency. Additionally, the Earnings Per Share (EPS) analysis illustrated distinct trajectories for each SOE, highlighting the nuanced financial outcomes of their strategic decisions. These findings underscore the potential of SOEs to harness capital market access, strategic realignment, and operational optimization to drive financial and operational efficiency, emphasizing the importance of such endeavors in aligning SOEs with global market standards and bolstering economic competitiveness. This comprehensive analysis underscores the multifaceted financial benefits of restructuring and listing for SOEs, shedding light on their role in fostering economic development and market dynamism.

Enterprise performance online evaluation based on extended belief rule-base model

The performance evaluation method based on data envelopment analysis (DEA) is one of the important tools to measure the competitiveness and productivity of enterprises. However, the input and output of enterprises may contain negative data and the essence of DEA is an iterative optimization model, resulting in a low applicability of the DEA-based performance evaluation method in the real word, especially for the dilemma of evaluating enterprise performance within a limited time for new enterprises. Therefore, this study firstly develops a DEA model that can handle negative data for enterprise performance evaluation, and then further establishes a new method base on the extended belief rule-base (EBRB) model for enterprise performance online evaluation. A case study about 35 Chinese state-owned enterprises are conducted to verify the effectiveness of the proposed enterprise performance online evaluation method. Experimental results showed that the proposed method has capable of evaluating enterprise performance with accurate efficiency values better than some existing performance evaluation methods, and its computation time is significantly less than the DEA-based performance evaluation method, which guarantee that the proposed enterprise performance online evaluation method can serve as a reference for the promotion of enterprise productivity and sustainable economic development.

The tangible hand? Does Communist Party involvement in governance promote corporate M&A performance

This paper investigates the impact of the Communist Party of China's (CPC) participation in corporate governance on the M&A performance of Chinese State-Owned Enterprises (SOEs). Using unbalanced panel data from 2008 to 2020, the findings demonstrate that while the CPC's involvement has no significant effect on short-term M&A performance, it positively impacts long-term performance. This effect is especially pronounced in local SOEs and cross-district M&A deals. The research underscores the need for a nuanced approach to political participation in corporate governance and contributes to the understanding of the dynamics in SOEs’ M&A performance.

THE IMPACT OF ECONOMIC POLICY CHANGE ON OUTWARD FOREIGN DIRECT INVESTMENT: EVIDENCE FROM CHINA’S INVESTMENT IN CANADA

The resurgence of anti-globalization has made multinational companies concerned about the impact of host countries’ economic policy change on outward foreign direct investment (OFDI). However, existing studies mainly focus on improving a host country’s institutional environment but ignore the impact of anti-globalization policies. This paper aims to complement this line of research by considering the effect of one-time economic policy shock on OFDI. In particular, using a unique dataset, this paper empirically investigates the effect of Canada’s review policy on investments by Chinese state-owned enterprises (SOEs). The results suggest that an intensified review policy effectively discouraged Chinese SOEs from investing in Canada. However, as a coping strategy to the review policy, Chinese SOEs continued to invest in Canada by adding more funding to the existing projects, establishing new businesses or investing in small-scale deals.

Mobilising a shared service centre in a power-dominant context: an actor-network analysis in a Chinese state-owned enterprise

Purpose This paper aims to explore how a shared service centre (SSC) is mobilised in a power-dominant context of a Chinese state-owned enterprise (SOE). Specifically, it examines the mobilisation of SSC within this multi-divisional SOE, the role and dynamics of actors involved and the influence of changes in the integrated information system (IIS) during the mobilisation process. Design/methodology/approach The study follows a qualitative case study methodology. The authors draw on actor-network theory to examine the network and translation processes constructed in mobilising SSC in the chosen SOE. The data sources of this study were collected through semi-structured interviews, observations and documentary reviews. Findings The mobilisation of SSC is not a linear process but rather a “spiral” interplay through continuous interactions and compromises between human and non-human actors. Power gave the core actor as an orchestrator legitimacy and formality to reduce resistance and obstruction in translation for the mobilisation of SSC. The changes in IIS appear to facilitate the interaction between the heterogeneous actors. Practical implications This case study contributes towards understanding the mobilisation of SSC in a power-dominant context by highlighting the impact of changes in IIS and the details of the mobilisation of SSC in terms of the role played by both the individual actors and the technology. Originality/value This study provides a broader understanding of the interactions of the heterogeneous actors for mobilising SSC in a power-dominant context. More importantly, the study inspires future research into examining how SSC practices unfold and how the changes in IIS influence the mobilisation of SSC.

Are Chinese State-Owned Enterprises Undervalued?

Are Chinese State-Owned Enterprises Undervalued?

From greed to good: how government regulations of executive compensation impact corporate ESG performance?

ABSTRACT This study investigates the impact of government regulation for CEO compensation on the environmental, social, and governance (ESG) performance of Chinese state-owned enterprises (SOEs) from 2011 to 2020. We utilize a difference-in-differences (DiD) regression framework to examine this relationship and ensure validity through parallel trend assessment. Our results affirm that government CEO pay regulation negatively affects ESG performance. We also explore the moderating impact of social trust and CEO shareholding, uncovering evidence that in regions where social trust holds significance, the adverse impact of pay regulation on ESG performance diminishes. Furthermore, higher CEO shareholding serves as a moderator, aligning CEO and shareholder interests to mitigate the adverse effects of government pay policies. To fortify the robustness of our main findings, we employ additional tests, including alternative variables for CEO pay restrictions, propensity score matching, placebo tests, and the sys-GMM model.

Externalisation of Domestic Economic Constraints: China’s Spatial Fix in Kazakhstan and Turkmenistan

Growing capital over-accumulation and excessive industrial production have forced policymakers in Beijing to search for profitable outlets overseas. The Belt and Road Initiative (BRI), which focuses on infrastructure connectivity projects across Eurasia, reflects these efforts. This paper theorises BRI as a spatial fix aimed at overcoming the recurring problem of over-accumulation of capital. This paper focuses on BRI-led projects in Kazakhstan and Turkmenistan. By conducting unstructured interviews with experts and examining projects, this paper found that BRI-led projects in Kazakhstan and Turkmenistan not only provided a new geographical space and under-saturated market for Chinese surpluses but also created the demand for Chinese State-Owned Enterprises (SOEs) which were facing a decline in returns. This paper also found that through elements such as non-competitive bidding, embedded conditionality, and double preferential loans, China has successfully stimulated overseas demand for its surpluses. The study, therefore, concludes that BRI-led projects in Kazakhstan and Turkmenistan serve as a spatial fix for China.

Green outward foreign direct investment and host country environmental effects: The home country's carbon emission reduction system is crucial

Studies on the environmental impacts of outward foreign direct investment (OFDI) with less attention paid to the relationship between gradually increasing green investment and carbon emissions in the host countries. Based on the background of global carbon emission reduction, this study constructs a STIRPAT and difference-in-differences model to analyze the environmental effects of China's OFDI in ASEAN countries using unique enterprise-level data of China's OFDI from 2005 to 2020. The results show that the impact of Chinese OFDI on carbon emissions in ASEAN countries varies with the investment sector, the home country's enterprise ownership type, and environmental policy. China's green OFDI shows a clear “Pollution Halo” effect regarding investment sectors. However, the “Pollution Halo” effect of green OFDI by Chinese state-owned enterprises (SOEs) is more pronounced when considering the home country's enterprise ownership type. In addition, from the home country's environmental policy perspective, implementing China's domestic low-carbon pilot policy has a “Pollution Haven” effect on host countries. This study provides policy implications to promote the green transformation of Chinese OFDI and carbon emission reduction in ASEAN countries.

Does paradoxical leadership influence employees' proactive work behavior? A study based on employees in Chinese state-owned enterprises.

Paradoxical leadership has emerged as an increasingly important research topic in the context of Chinese state-owned enterprises, which are currently facing contradictions between maintaining stability and implementing changes, short-term profits and long-term sustainable development, and public nature and marketization. Based on social cognitive theory and social exchange theory, this study employed a questionnaire survey to explore the influence of paradoxical leadership on employees' proactive work behavior and the mediating role of superior-subordinate guanxi and self-efficacy. The study involved 540 employees working in Chinese state-owned enterprises. We conducted confirmatory factor analyses to test the validity of the measurement model and regression to evaluate the direct effects. Subsequently, we used bootstrapping to confirm mediation and serial mediation effects. The study found that (1) Paradoxical leadership can effectively enhance employees' proactive work behavior; (2) The superior-subordinate guanxi plays a mediating role between paradoxical leadership and employees' proactive work behavior, that is, paradoxical leadership enhances employees' proactive work behavior by improving the superior-subordinate guanxi; (3) Self-efficacy plays a mediating role between paradoxical leadership and employees' proactive work behaviors, that is, paradoxical leadership promotes employees' proactive work behavior by enhancing their self-efficacy; (4) The superior-subordinate guanxi and self-efficacy play a chain mediating effect between paradoxical leadership and employees' proactive work behavior, forming a chain of "Paradoxical leadership-Superior-subordinate Guanxi-Self-efficacy-Employees' proactive work behaviors." This study enriches the theoretical research on paradoxical leadership and provides suggestions for state-owned enterprises to enhance employees' proactive work behavior.

Nonstate ownership, agency costs and corporate performance: evidence from Chinese state-owned enterprises

PurposeThe primary objective of introducing nonstate ownership into state-owned enterprises (SOEs) is to enhance corporate performance. This study explores how nonstate ownership affects corporate performance, emphasizing agency costs as the primary mechanism.Design/methodology/approachUsing data from 2010 to 2019 for listed SOEs, the authors measure nonstate ownership based on shareholding ratios, control rights and shareholding–control matching. The authors also use fixed-effects and mediation-effects models, with agency costs as the primary mechanism.FindingsIncreased nonstate shareholding ratios, stronger control rights and improved shareholding–control matching promote SOE performance. Nonstate shareholding ratios boost performance through resource effects, while control rights and shareholding–control matching promote performance by mitigating agency costs. A heterogeneity analysis indicates stronger effects in local SOEs and highly marketized regions. Moreover, control rights and shareholding–control matching reinforce the positive impact of shareholding ratios on performance.Originality/valueThe mixed-ownership reform of Chinese SOEs aims to optimize shareholding and control structures between state and nonstate shareholders. Therefore, research on the impact of nonstate shareholding ratios, control rights and shareholding–control matching on corporate performance is highly pertinent. However, existing studies have focused on the effects of single factors on performance, without exploration of the economic implications of shareholding–control matching. This study not only prioritizes the optimization of shareholding and control structures but also underscores the importance of granting nonstate shareholders control rights proportionate to their shareholding, providing critical evidence of the value of improving SOEs' ownership structure.