Corporate Reform Research Articles

Ownership structure and firm performance: Evidence from the Chinese corporate reform

We employ a new classification of ownership identity to analyze the impact of ownership structure on enterprise performance in China. Using both fixed effects model and Generalized Methods of Moments (GMM), this study finds that marketized state-owned enterprises outperform firms controlled by the government, indicating that partial privatization of state-owned Chinese firms improves corporate governance. Non-controlling large shareholders of marketized state-owned enterprises and private enterprises are found to play active roles in corporate governance. Lastly, there is evidence that ownership concentration of a controlling shareholder decreases the incentives to expropriate minority shareholders.

VoterMedia as Participatory Budgeting

This paper compares two experimental models for participatory budgeting: the model pioneered by the city of Porto Alegre, Brazil; and the blog competitions implemented at the University of British Columbia and at several municipalities in Metro Vancouver, Canada. The mainstream Porto Alegre participatory budgeting (PAPB) model is well documented elsewhere, so more detailed descriptions are given here for votermedia. Votermedia is designed primarily to fund voter information. PAPB typically funds a range of municipal services, not including voter information. Votermedia is more competitive and entrepreneurial, with open entry for various potential providers, who may make a profit or a loss. With PAPB, the voter-selected services are provided by municipal employees with specified budgets. The system for voting funds in votermedia can be seen as an extension of PAPB-style voting, to further empower citizens to determine the size of each budget slice. Votermedia blog competitions can cost as little as $8,000; PAPB processes generally involve much larger budgets. The changing economics of media have strengthened the case for government funding of public interest journalism, especially at the municipal level. Votermedia is proposed as a cost-effective way to enhance citizen engagement and information in a PAPB process. This would ideally include a continuous-time blog contest with online voting that starts at the beginning of the budget's public consultation stage. Blogs could also be rewarded via a competitive vote on the same ballot when citizens are choosing which projects to fund from the participatory budgeting finalists menu; and/or votermedia could be one of the candidate projects to fund going forward. The potential future evolution of participatory budgeting including votermedia is explored. This could include providing other public benefits besides voter information, as well as political reform of other democracies and corporations.

Corporate regulatory strategies in context

PurposeThe wave of regulatory reforms in European telecoms and electricity industries has had an important impact on the structure of the state as well as of corporations. The purpose of this paper is to explore the establishment of these regulatory organizations at the state and corporate levels within a unified theoretical framework, that is grounded in the politics of regulation.Design/methodology/approachThe case selection includes governance structures at the state and corporate levels in 16 European countries in both telecoms and electricity.FindingsThe data reveal that regulatory agencies exist in both telecoms and electricity sectors in all 16 countries under study, with the notable exception of Switzerland's electricity sector. At the same time, business corporate reforms were also evident, mainly via the creation of corporate regulatory offices at the headquarters of the firms. These departments, which redefine the patterns of responsibility within the corporation and have played the leading role in the negotiations with the external regulatory environment.Originality/valueThis paper strives to overcome the tendency in the scholarly literature to look only at one or the other aspect of the growth of regulatory development and therefore also to offer a narrow understanding of the growth of regulation. It asserts that the commonalities in the expansion of autonomous regulatory agencies and corporate regulatory departments suggest that the growth in the regulatory professionalization of the state and of business corporations reflects the changing nature of capitalist economy and society and the rise of a new global order of “regulatory capitalism”.

1. Education and Capitalism

Schooling in the twenty-first century United States is not the product mainly of educational philosophies and resources—together with whatever imagination and initiative that teachers, students, parents, and communities can bring to bear. Instead, it is dominated by the changing demands of capitalist society for an increasingly stratified and regimented workforce. In the first article in this section, John Bellamy Foster analyzes the political economy of education in capitalist society; the relation of this to the evolution of U.S. schools from the early twentieth century on; and the current corporate reform movement aimed at the restructuring and privatization of education—symbolized by the Bush No Child Left Behind and the Obama Race to the Top programs.This article can also be found at the Monthly Review website, where most recent articles are published in full.Click here to purchase a PDF version of this article at the Monthly Review website.

The Theory of the Firm: The Corporation as Sole-Proprietor Surrogate

The Theory of the Firm: The Corporation as Sole-Proprietor Surrogate

Does Information technology pay off corporate reformers?:

Does Information technology pay off corporate reformers?:

Problems and Countermeasures on Corporate Internal Audit in China

Along with the increasing embeddedness of corporate reform, current China has to confront the significant issues of how to establish and improve corporate governance structure, optimize internal control, promote effective use of corporate resources, and avoid fraud and waste. Corporate internal audit is the auditing, monitoring and evaluating on corporate internal economic activities, so as to strengthen internal management and increase economic efficiency. Its purpose is to expose and reflect real status of corporate assets, debts, profit and loss, to investigate various illegal problems on corporate financial receipts and expenditures, to maintain China’s ownership rights, to promote clean government establishment, to prevent the loss of state-owned assets, and to serve the governmental macro-control. Therefore, based on relevant theories of internal audit, this paper is to analyze several problems on internal audit and propose countermeasures to the internal audit problems under China’s modern enterprise system.

The Struggle over Ownership: How the Reform of State-owned Enterprises Changed China

Events in the 1980s became the driving force behind state-owned enterprise (SOE) restructuring in the 1990s and beyond. In particular, the 1992 decision to seek listings for state-owned enterprises overseas had a tremendous impact on China's politics, economy and society. It may have been inevitable that the financial surgery on state enterprises would have serious social consequences. The assumptions behind this effort to create national champions, however, also defined the limitations on the Chinese government's response to the 2008 global financial crisis that broke out on the thirtieth anniversary of the 'reform and opening' policy. While SOE reform may not be the single most important determinant of how China has developed, it has had a unique directional impact by implanting the core of the Western financial system inside the Chinese state. This paper seeks to briefly review the evolution of corporate reform and show how Western capitalism has made its broader impact.

Activist Shareholders: Does Shareholder Fiduciary Duty Change Them from Potential Destroyers of Corporate Values to the "White Knights" of Corporate Reform?

Activist Shareholders: Does Shareholder Fiduciary Duty Change Them from Potential Destroyers of Corporate Values to the "White Knights" of Corporate Reform?

THE ILLUSION OF CORPORATE SOCIAL RESPONSIBILITY:COCA-COLA AND CORPORATE CITIZENSHIP

Under contemporary globalization, corporations have achieved a size and scope unparalleled to any other time in history (May 24). In response to growing corporate power,there have been contestations from unions, environmentalists, and anti-corporate activists stressing corporate reform. One result of social pressure has been the incorporation of Corporate Social Responsibility (CSR) campaigns into corporate branding strategies (May 201). On thesurface, these campaigns appear to address and integrate social concerns into regular business practices. Yet, I argue that CSR campaigns are one component of a broader strategy to improvethe management of market crises by incorporating criticisms into corporate managed social responsibility initiatives and can be understood using Foucault’s concept of governmentality. Instead of addressing critiques in a substantive manner, CSR initiatives “break off the sharp points of contention” to bolster legitimacy for free market policies (Hobsbawm). To further understand this process, I focus on the Coca-Cola Company’s CSR campaigns on two scales; theinternational and the national in Chile.

Regulatory Dualism as a Development Strategy: Corporate Reform in Brazil, the U.S., and the EU

Countries pursuing economic development confront a fundamental obstacle. Reforms that increase the size of the overall pie are blocked by powerful interests that are threatened by the growth-inducing changes. This problem is conspicuous in efforts to create effective capital markets to support economic growth. Controlling owners and managers of established firms successfully oppose corporate governance reforms that would improve investor protection and promote capital market development. In this article, we examine the promise of regulatory dualism as a strategy to diffuse the tension between future growth and the current distribution of wealth and power. Regulatory dualism seeks to mitigate political opposition to reforms by permitting the existing business elite to be governed by the old regime, while allowing other firms to be regulated by a new parallel regime that is more efficient. Regulatory dualism goes beyond similar but simpler strategies, such as grandfathering and statutory menus, by incorporating a dynamic element that is key to its effectiveness, but that requires a sophisticated approach to implementation. A paradigmatic example of regulatory dualism is offered by Brazil’s “New Market” (Novo Mercado), a voluntary premium segment within the Sao Paulo Stock Exchange that allows companies to commit credibly to significant protection of minority shareholders without imposing reform on companies controlled by the established elite. Yet regulatory dualism as a strategy for capital market reform is not unique to Brazil, nor is it suited just to developing countries. The long-standing U.S. approach to state-level corporate chartering is arguably better understood as a form of regulatory dualism than -- as is the custom -- as a form of regulatory competition, and the same can be said of EU corporate law post-Centros. The dramatic failure of Germany’s Neuer Markt illustrates some of the pitfalls of regulatory dualism. If thoughtfully deployed, however, regulatory dualism holds substantial promise in overcoming political barriers to reform, not just of corporate governance and capital markets, but of other economic institutions as well.

Global Forces and Corporate Reforms in South Korea

This article attempts to examine the international forces at work in the transformation of corporate governance in South Korea. In so doing, it provides a corrective to existing analyses that pay inadequate attention to how internationalization shapes domestic decisions about corporate reforms. The article explores the causal impact of four factors — overseas reforms and competition, global market constraints, transnational norms, and internalization of external pressures. It posits that these different forms of internationalization have created powerful forces for sustained corporate reforms in South Korea since the Asian financial crisis of 1997—8. While they have not preordained convergence toward the Anglo-American model of capitalism, they have overwhelmed political resistance and institutional inertia to result in an important shift in the architecture of South Korean corporate governance.

Post-Crisis Corporate Reform and Internal Capital Markets in Chaebols

Kim, Joon-Kyung.2009.Post-Crisis corporate reform and internal capital markets in Chaebols,Reports,[Seoul]KDI School of Public Policy and Management,KDI School Working Paper Series/09-15,37

The Expected Revenue Loss from a Corporate Tax Which is Neutral with Respect to Financing Decisions (Was Kostet Eine Finanzierungsneutrale Besteuerung Von Kapitalgesellschaften?) (German)

An Estimation of the Revenue Loss from Introducing a Notional Interest Deduction on Nominal Capital into the German Corporate Tax. Capital income taxation in Germany distorts financing decisions of corporations as the after-tax cost of capital for equity is considerably higher than for debt. Since 2006 the German Council of Economic Experts has been proposing a neutral tax system similar to the Norwegian shareholder ACE tax. In the last German corporate and personal income tax reform in 2008/09 this proposal has not been realized because revenue losses were expected to be unacceptably high. In this paper we estimate the expected tax revenue losses of an alternative concept which also ensures neutrality with respect to financing decisions: a notional interest deduction on nominal capital and capital reserve. Data from the official German corporate income tax statistics are used. We show that revenue losses are relatively small.

Common Challenges Facing Shareholder Suits in Europe and the United States

Episodic and even sometimes systematic misbehavior by businessmen and corporate entities is ubiquitous. While Enron and WorldCom were the battle cries for corporate reform in the U.S. so it was with Ahold and Parmalat across Europe. No country is free of concern that company officers will misbehave thereby injuring investors, consumers and destroying shareholder value. Thus, this symposium issue collects the recent experiences across Europe in strengthening shareholder suits. Most recent legislative efforts in Europe, and hence the comments in the symposium, are focused on the derivative suit. Just as the American experience with class actions, reviewed separately in this symposium, is long and rich, it is also possible to draw upon the American experience to emphasize the challenges law reform faces on both sides of the Atlantic in energizing the derivative suit. The following addresses multiple themes that pervade the various articles exploring the derivative suit in Europe and hopefully provides a useful perspective drawn from the American experience with derivative suits.

Subject to Negotiation: The Mechanisms Behind Co-Optation and Corporate Reform

While political opportunity structure theory details how social movement organization (SMO) campaigns focus on the state and political processes, a shift toward neoliberal policies prompts those actors to target corporations directly in order to achieve their goals. This shift creates new challenges for social movements. Unlike the state, corporations are not guided by a democratic ethos, which limits movement organizations' access to decision makers. To achieve access, challenging groups often adopt institutionalized structures and tactics, which can also increase the risk of co-optation. Despite previous research, both the process of co-optation and the distinction between co-optation and other movement outcomes remain unclear. Here, applying event structure analysis to a specific case separates these outcomes: the international campaign the environmental organization Greenpeace waged to change Coca-Cola's refrigeration practices between 1998 and 2005. This analysis suggests that framing is an important strategy for SMOs to utilize, but may not be effective unless frames are backed by action. The combination of framing, institutional tactics, and noninstitutional tactics may be most effective in movement-firm interactions. Overall, this analysis contributes to a broader understanding of social movement tactics, outcomes, and framing in an age of increased corporate power.

Governing Capital? Corporate Social Responsibility and the Limits of Regulation

ABSTRACTThe current concern with corporate social responsibility must be seen in the context of major shifts in the functioning of the market, the state and civil society, and of the boundaries between them, and in the ways that we envision them. Capitalism has been reconfigured as an ethical order in which transnational corporations can, indeed must, be accountable for the global well‐being of citizens be they rich or poor, capitalists or workers. This ethical commitment to global justice is to be promoted by the mobilization of civil society, governing with integrity both large corporations and a somewhat marginalized regulatory state. In short, regulation is being privatized. Contributors to the debate which follows vary in the extent to which they accept this vision of how capital is to be governed. There are three principal grounds for scepticism. First, in a world so marked by sharp inequalities of both income and conditions of life, how can corporate initiatives be both profitable and consistent with the interests of the poor? Second, how can global civil society, which is itself structured by relation of power and class, be counted on to regulate corporations in the interest of the poor? Third, do limited corporate reforms undercut alternative transformative projects? Those with greater sympathy for civil society involvement in governing corporate capital point out that transformative projects grow out of everyday experiences of progressive change, not out of defeatist visions of an untransformable hegemonic capital. Readers — please decide.

Corporate reforms and the management cycle of Net One Systems.

Corporate reforms and the management cycle of Net One Systems.

Financial and Corporate Reform in Korea: Survival Strategies of the Korean “Chaebols”

Financial and Corporate Reform in Korea: Survival Strategies of the Korean “Chaebols”

Make Room at the Table for Teachers

Some will rob you with a six-gun, and some with a fountain pen. --Woody Guthrie Some will rob you with act of Congress. --Educator Roundtable IT DOES not surprise us that we have much in common with NEA leadership. After all, a number of Educator Roundtable founders have a long history of strong union activity. We agree with Joel Packer when he argues correctly that NCLB not working, that AYP (adequate yearly progress) policies are fundamentally flawed, and that legislation is an unfunded, unfair, and unattainable mandate that largely labels and punishes schools and denies all children their basic right to a great public school. Despite these statements, we fear that NEA leadership--by insisting that it cannot work to dis-mantle NCLB and replace it with education policy more suitable to life, liberty, and pursuit of happiness--teeters close to moral bankruptcy. We call on union leaders, members of Congress, and their Business Roundtable allies to do something radical: we ask them to listen to highly qualified teachers who work with children every day. People who claim to care about survival of public education need to know that No Child Left Behind is sucking very life's blood from our profession, demanding that teachers become readers of scripts rather than professionals engaged in critical work of educating children in their care. As long as union leaders refuse to insist that teachers' voices be brought to forefront in curriculum decisions, teachers remain muzzled and impotent. Make no mistake about it: this silencing of teachers is catastrophic to health of our nation. What is at stake is not only status of teaching as a profession but very future of a generation of children who are being regimented into Stepford automatons. Finding little resistance from educators, corporate reformers have replaced language of growth, development, creativity, ingenuity, and responsibility with words straight from factory floor: performance, accountability, standardization. An education system that valued informed voices of America's teachers would look much different from system that teachers and students currently suffer under. And it is time to give teachers respect that most of them deserve, by inviting them to become central figures in shaping classroom practices and local education policy. We make these issues quite clear in our petition (see sidebar, page 273) and on our website, though Mr. Packer continues to push NEA lie that our organization does not propose any changes or alternatives. The duplicity here is twofold: 1. Mr. Packer was privileged to witness our earliest conversations and knows exactly what our proposed positive change is: give teachers a genuine voice in policy setting, implementation, and evaluation. 2. The NEA leadership agrees with that position. As Mr. Packer put it: We know that top-down programs and mandates developed by those far removed from classroom don't work. Programs that actively involve educators and parents in shared decision making with their school leadership and that include support from federal government--through technical assistance and useful educator-friendly guides to best practice--should be focus of next Note use of phrase the next ESEA. Don't they mean the fixed NCLB? The NEA leadership cannot use acronym NCLB because they know what we've maintained for better part of a year: NCLB will never allow type of shared decision making that NEA leadership correctly calls for. NCLB is premised on belief that teachers and administrators are primarily problem and not worthy of being part of solution. This is a fundamental tenet of law. Furthermore, NCLB mandates a predetermined path to educational salvation--regardless of what parents or teachers might desire--as failing schools must follow NCLB's sanctions, sanctions that ultimately lead to firing of very teachers and administrators that NEA leadership claims to support. …