Performance Of Chinese Firms Research Articles

A predictive study on the impact of board characteristics on firm performance of Chinese listed companies based on machine learning methods

Purpose This study aims to examine the impact of board characteristics on firm performance while also exploring the influential mechanisms that help Chinese listed companies establish effective boards of directors and strengthen their corporate governance mechanisms. Design/methodology/approach This paper uses machine learning methods to investigate the predictive ability of the board of directors' characteristics on firm performance based on the data from Chinese A-share listed companies on the Shanghai and Shenzhen stock exchanges in China during 2008–2021. This study further analyzes board characteristics with relatively strong predictive ability and their predictive models on firm performance. Findings The results show that nonlinear machine learning methods are more effective than traditional linear models in analyzing the impact of board characteristics on Chinese firm performance. Among the series characteristics of the board of directors, the contribution ratio in prediction from directors compensation, director shareholding ratio, the average age of directors and directors' educational level are significant, and these characteristics have a roughly nonlinear correlation to the prediction of firm performance; the improvement of the predictive ability of board characteristics on firm performance in state-owned enterprises in China performs better than that in private enterprises. Practical implications The findings of this study provide valuable suggestions for enriching the theory of board governance, strengthening board construction and optimizing the effectiveness of board governance. Furthermore, these impacts can serve as a valuable reference for board construction and selection, aiding in the rational selection of boards to establish an efficient and high-performing board of directors. Originality/value The study findings unequivocally demonstrate the superiority of nonlinear machine learning approaches over traditional linear models in examining the relationship between board characteristics and firm performance in China. Within the suite of board characteristics, director compensation, shareholding ratio, average age and educational level are particularly noteworthy, consistently demonstrating strong, nonlinear associations with firm performance. Within the suite of board characteristics, director compensation, shareholding ratio, average age and educational level are particularly noteworthy, consistently demonstrating strong, nonlinear associations with firm performance. The study reveals that the predictive performance of board attributes is generally more robust for state-owned enterprises in China in comparison to their counterparts in the private sector.

Digital transformation, supplier concentration, and CEO financial experience: Unveiling the dynamics of innovation performance in Chinese firms

In the dynamic landscape of rapid change and the pervasive influence of the digital revolution, the discussion surrounding the impact of digital transformation on the innovation performance of firms has become a focal point of intense debate. This paper aims to contribute to the evolution and advancement of traditional organizations toward high-quality development by addressing this issue through the integration of technology into the framework, leveraging the resource-based theory. The study seeks to explore the influence of digital transformation on innovation performance, specifically examining the role of supplier concentration in this relationship. Additionally, we investigate the moderating effect of CEO financial experience on the association between digital transformation and innovation performance. Utilizing multiple regression methodologies and analyzing data from Chinese listed firms spanning the period from 2007 to 2022, our empirical findings reveal a direct positive relationship between digital transformation and innovation performance. Furthermore, the study uncovers an indirect pathway through which digital transformation enhances innovation performance by mitigating supplier concentration. Notably, the positive impact of digital transformation is amplified by a CEO's background in finance. Finally, the effect of digital transformation on innovation performance is particularly pronounced in sectors such as state-owned entities, advanced technology companies, large-scale businesses, and those in their maturity phase. These insights provide valuable contributions to addressing concerns related to digital transformation, particularly in emerging economies like China. The findings offer essential lessons for navigating the transition to Industry 4.0 and fostering sustainable innovative practices. By emphasizing the role of supplier concentration and the moderating influence of CEO financial experience, this research contributes to a nuanced understanding of how digital transformation can positively impact innovation performance across diverse sectors.

Effects of a CEO’s overconfidence and his/her power on the performance of Chinese firms

Effects of a CEO’s overconfidence and his/her power on the performance of Chinese firms

Star CEOs and ESG performance in China: An integrated view of role identity and role constraints logics

AbstractThis study seeks to shed light on the effect of star CEOs on the environmental, social, and governance (ESG) performance of Chinese firms. Relying on the theoretical perspective of role identity and role constraints, we analyze data from 1222 Chinese firms listed on the Shanghai and Shenzhen Stock Exchanges from 2006 to 2019. The results analyzed using the ordinary least squares estimate method reveal a positive effect of star CEOs' extreme confidence and legitimacy pressure mechanisms on ESG performance. We also find that this positive relationship is negatively moderated by higher organizational slack but strengthened by a lower level of regional marketization, as the degree of firms' dependence on external stakeholders' resources differs significantly. Additionally, this study finds that ESG activities are less likely to be associated with firm performance if star CEOs pursue them to satisfy their need for star status. These findings supplement the early tests of the influence mechanism of star CEOs on organization‐level results and expand the context discussion of role identity and role constraints theory in the Chinese institutional environment.

Green entrepreneurial orientation and financial performance in Chinese firms: The role of stakeholder engagement and green absorptive capacity

AbstractBased on the natural‐resource‐based view and capability theory, this study explores the impact of green entrepreneurial orientation (GEO) on financial performance, the separate and joint moderating effects of stakeholder engagement and green absorptive capacity (GAC). Using data obtained from 230 Chinese manufacturing firms, it was found that GEO has positive influence on financial performance, supplier engagement and GAC strengthen the positive effect of GEO on financial performance while customer engagement has not. In addition, our empirical findings show that when a high level of supplier engagement combined with a high level of GAC, the positive effect of GEO on financial performance is increased. These findings provide important theoretical and practical implications for Chinese manufacturing firms to achieve sustainable development.

Product Market Competition and Firm Performance: Business Survival Through Innovation and Entrepreneurial Orientation Amid COVID-19 Financial Crisis.

The product market competition has become a global challenge for business organizations in the challenging and competitive market environment in the influx of the COVID-19 outbreak. The influence of products competition on organizational performance in developed economies has gained scholars’ attention, and numerous studies explored its impacts on business profitability. The existing studies designate mixed findings between the linkage of CSR practices and Chinese business firms’ healthier performance in emerging economies; however, the current global crisis due to the coronavirus has made product market completion fierce, which ultimately affects business firms’ performance. This study focuses on this logical global challenge, investigates the rationale, and examines product-market completion impact on firms’ performance operating in the Chinese markets. The study collected data from the annual reports of Chinese business organizations with A-share listing and registered with the database of China Stock Markets and Accounting Research (CSMAR). The study employed a Generalized Method of Moment technique and investigated the connection between product market competition and Chinese firm performance. The empirical analysis of this study highlights the conclusion that market competition positively and significantly affected business firms’ performance. This study specified that product market competition play a dynamic and indispensable role in achieving healthier firm performance in the Chinese markets. This study provides valuable insights on practical implications and future research directions for the scholars to draw interesting results with new study models.

Demand Chain Strategy and Chinese Firm Performance

The purpose of this research is to enhance the extant understanding of the information technology (IT)-strategy relationship. The study aims to test the robustness of the relationships among the concepts of IT analytic capability, demand chain strategy, and firm performance besides investigating the interaction effects of product life cycle (PLC) management on the IT-strategy relationship. Based on the resource-based view (RBV) of the firm and the research paradigm of “capability-strategy-performance,” 300 Chinese fashion firms were surveyed to collect data by Demand Chain Research Institute of Shanghai University. In order to test the hypothetical relationship in the conceptual model, valid questionnaires from 185 firms were collected in this study, and the effective rate reached 61.7%. Findings suggest that IT analytic capability associates positively with demand chain strategy, and PLC plays a moderation role between IT analytic capability and demand chain strategy. The findings further support the link between demand chain strategy and better firm performance. This study contributes to existing information systems and operation management literature by the above effects in the retail context. Overall, these results reflect recent business and transformation changes from supply chain strategy to demand chain strategy for the Chinese fashion industry.

Merger and Acquisition and Firm Performance: An Analysis of Proton-Geely


 
 
 This study draws attention to a merger and acquisition case that involves Geely and Proton respectively, Chinese and Malaysian firms. The article mainly focuses on the financial performance of Geely before and after the acquisition. To achieve this, the paper adopted a qualitative research method by using archival data sources to analyze the single case of the acquisition of Proton by Geely. The sampling area is Asia being China and Malaysia describing a cross-border transaction in emerging markets. The paper performed ratio analysis to investigate the different indicators of Geely’s financial performance before and after the acquisition. After documenting and analyzing this case, the paper argues that Geely performed well before and after the acquisition. The analysis can serve as evidence of a better financial performance of Chinese firms after cross-national M&A transactions.
 As a qualitative research, this article benefits not only from the bibliometric analysis done through past research and official reports related to the case but also from the quality and validity required for a case study analysis. This study is an original attempt at presenting the case study of Geely’s acquisition of Proton from the lens of the acquiring firm’s performance before and after the acquisition. However, due to the limited information provided by financial ratios, the findings of the paper are not exhaustive.
 
 

Transformational Leadership and Knowledge Sharing: Determinants of Firm’s Operational and Financial Performance

The purpose of this study is to explore the effects of transformational leadership and knowledge-sharing processes on operational and financial performance in Chinese firms. The article applied structural equation modeling to inspect the influence of transformational leadership on knowledge sharing and their effects on organizational performance, based on the data collected from 263 respondents in 112 manufacturing and service companies in China. The findings show that knowledge collecting and knowledge donating mediate the correlation between transformational leadership and two specific aspects of organizational performance. In addition, transformational leadership has a greater influence on financial performance, whereas knowledge sharing is more significantly associated with operational performance. This article highlights the significance of practicing transformational leadership to stimulate individuals’ knowledge-sharing behaviors, which are important prerequisites for improving organizational performance. The article provides clearer understanding for scholars and practitioners about the new and effective pathway to promote firm’s operational and financial performance.

중국 상장기업의 여성이사가 경영자 보상의 성과 민감도에 미치는 영향

중국 상장기업의 여성이사가 경영자 보상의 성과 민감도에 미치는 영향

Global mindset and the performance of Chinese firms

More and more Chinese firms are pursuing internationalization strategies. However, most of them have not managed to succeed in the global markets. One possible reason for such failure is their lack of a proper global mindset. This study investigates the following three issues: first, how global minded Chinese firms are; second, what the critical drivers for their global mindedness are; third, what strategic orientation these Chinese firms adopt when they pursue internationalization strategies and how their global mindedness is related to their performance. Results indicate that first, the current level of global mindedness of most Chinese firms are fairly low. Second, experience with foreign culture, leadership vision and firm capacity are important determinants of a firm’s global mindedness. Third, global minded Chinese firms tend to pursue aggressive and risky internationalization strategies and they generally perform better than those with low level of global mindedness.

The impact of OFDI on the performance of Chinese firms along the ‘Belt and Road’

ABSTRACTUsing feasible generalized least squares (FGLS) and ordinary least square (OLS) estimations on a dataset of 1208 outward Foreign Direct Investment (OFDI) events by Chinese-listed firms from 2004 to 2015, this paper investigated the impact of OFDI on the performance of Chinese firms, from which it was found that Chinese firms that had invested in Belt and Road Initiative (BRI) countries were more productive than those that had invested in non-BRI countries. However, OFDI by both state-owned enterprises (SOE) and non-SOE were on average found to be negatively related to productivity and profitability, with state-owned enterprises (SOEs) having worse performance in terms of total factor productivity (TFP) than non-SOEs. A further subsample analysis found that Chinese firms that were investing in developing economies were performing better than those that had invested in developed ones; firms investing in sub-regions like Middle East and South Africa, East Asia and the Pacific, Latin America and the Caribbean experienced a positive post-OFDI TFP but investment in other regions had either insignificant or negatively significant coefficients, indicating that firms in general had poor post-OFDI performances. The findings in this paper are informative for developing going-global strategies for both firms and government authorities.

Signaling value of top management team

PurposeThe purpose of this paper is to integrate the upper echelon theory with signaling theory and examine the impact of top management team (TMT) on the initial public offering (IPO) performance of Chinese firms in the USA.Design/methodology/approachThis study used Security Data Corporation (SDC) that is a central database for foreign IPOs in the USA. The authors identified 142 Chinese firms that issued stocks on the US markets between 2003 and 2014. This study used firm’s final prospectuses to collect data manually.FindingsThis study finds that the TMT characteristics such as functional heterogeneity and international exposure convey the positive signal of firm’s legitimacy to the US investors and increase the IPO performance.Originality/valueThis study extends the upper echelon perspective that has previously overlooked the signaling value of TMT characteristics in the foreign IPO studies. The top management plays an important role to the firm’s successful foreign market listing. Since China joined the WTO in 2001, a large number of Chinese firms have started IPOs in the USA, but there is a dearth of research on these firms. This study aims to contribute to the study of international business and management and describes that the TMT functional heterogeneity and international exposure have a significant role in the success of Chinese foreign IPOs.

The Effects of Corporate Ownership and Governance Structures on Cash Holdings and Performance of Chinese Firms

The Effects of Corporate Ownership and Governance Structures on Cash Holdings and Performance of Chinese Firms

Corporate Sustainability Performance of Chinese Firms: An Empirical Analysis from a Social Responsibility Perspective

ABSTRACT Drawing on the concepts of sustainable corporate development and the triple bottom line, this study develops a corporate sustainability efficiency (CSE) index to evaluate sustainable corporate performance. Further, with the help of a meta-frontier analysis and a hybrid measure approach, the study identifies the existence and determinants of efficiency gaps introduced by technology heterogeneity across the sectors. The findings, obtained from empirical tests based on panel data of 138 large Chinese firms in 2011–2015, indicate that firms’ CSE was low during the twelfth five-year plan (2011–2015). The best performance was in manufacturing, followed by construction/mining, services, and finance, while technology heterogeneity caused significant efficiency gaps across industries. The study also identifies various managerial failures and a technology gap that contributed to the lack of efficiency gains before offering context-specific suggestions.

중국기업의 국제인수합병이 기업성과에 미치는 영향요인 분석: 자원기반시각을 중심으로

중국기업의 국제인수합병이 기업성과에 미치는 영향요인 분석: 자원기반시각을 중심으로

The aftermath of CEO succession via hierarchical jumps on firm performance and agency cost: Evidence from Chinese firms

ABSTRACTThis paper analyzes the effect of CEO succession via overall hierarchical jumps on Chinese firm performance and agency cost. It categorizes hierarchical jumps into low, medium and high level. The study reveals through panel regression analysis that the CEOs appointed via medium hierarchical jumps substantially enhance firm performance. Conversely, the successors appointed through low and high hierarchical jumps have relatively no effect on firm profitability. Conclusively, this research evaluates that the aged CEOs should be preferred among the CEOs successors via high hierarchical jumps, which have mitigated the agency problem decisively.

Market Entry Strategies and Performance of Chinese Firms in Germany: The Moderating Effect of Home Government Support

This study uses data at the firm level to examine the relationship between the market entry strategies of 556 Chinese MNEs and their performance in Germany. Based on the revisited Uppsala internationalization process model, we develop six hypotheses on the impact of different market entry modes on performance, and on the moderating effect of home government support on this relationship. The findings show significant effects of location choice, activity mode and establishment mode, as well as duration of market presence on performance. Furthermore, strong interaction effects of home government support on these relationships reveal that the advantages of different market entry strategies are amplified by home government support. We conclude with theoretical and managerial implications, as well as a reflection of limitations and directions for future research. We conclude with theoretical and managerial implications as well as a reflection of limitations and directions of future research. The study contributes to international management research by integrating performance effects and the facilitating role of home government support into the internationalization process model.

Sustainable supply chain management practices and performance

PurposeThe purpose of this paper is to contribute significantly to the empirical investigations related to the impact of sustainable supply chain management (SSCM) practices on performance in Chinese firms. The paper also aims to theorize and empirically assess a comprehensive SSCM practices and performance model. The model incorporates two aspects of SSCM practices: internal and external management, and analyses the impact on corporate sustainability performance from all dimensions.Design/methodology/approachThis paper develops a conceptual model to investigate the impact of SSCM practices on the firm performance. Based on the data of 172 Chinese firms, this paper analyzes the impact of SSCM practices on firm economic performance, environmental performance, and social performance for each dimension by using PLS structural equation methods.FindingsThe results show that firm’s internal SSCM practices have a positive impact on firm’s environmental performance and social performance. Moreover, environmental performance and social performance are positively related to economic performance.Originality/valueA comprehensive SSCM practices performance model is proposed and empirically assessed for Chinese firms. The results of this investigation support the hypotheses that SSCM practices are environmentally and socially necessary and are favorable for business. A series of approach and implications of SSCM practices is recommended.

The Effect of Executive Compensation on Future Performance of Chinese Firms

The Effect of Executive Compensation on Future Performance of Chinese Firms