Reform Of State-owned Enterprises Research Articles

Construction of transportation infrastructure and the mixed ownership reform of state-owned enterprises: based on the perspective of high-speed rail opening

ABSTRACT We study the impact of transportation infrastructure construction on the degree of mixed-ownership reform of local state-owned enterprises. We find that the opening of high-speed rail can significantly promote the mixed ownership reform process of local state-owned enterprises. Mechanism testing shows that the opening of high-speed rail can promote inter-regional market integration and reduce the transaction costs of potential private investors participating in mixed-ownership reform, and improve the operational activities and management characteristics of state-owned enterprises, and strengthen the intrinsic motivations of potential private investors to participate in mixed-ownership reform, thereby having a positive impact on the degree of mixed-ownership reform of local state-owned enterprises. Further research finds that the above-mentioned effects are sustain-able and more obvious among local state-owned enterprises and state-owned enterprises in competitive industries with weak government influence, which can ultimately improve the capital market value and labour productivity of state-owned enterprises.

From Cadres to Managers: The Double-hundred Action Programme and China's State-owned Enterprise Reform

Abstract Reforming China's state-owned enterprises (SOEs) is a complex endeavour. Among recent initiatives, the double-hundred action (DHA) programme stands out for its ambition, especially in its aim to revamp corporate governance structures and management systems. A notable change is that top executive positions are now open to a wider and more diverse candidate pool and are no longer restricted to Party cadres. Based on fieldwork and interviews at a DHA-selected enterprise, this paper explores the DHA's impact on SOE functioning and governance. Our research reveals unanimous support among top executives for the policy, despite stringent performance appraisals and limitations on future promotion opportunities. The policy has significantly transformed recruitment, performance evaluation and remuneration within the enterprise under study. However, although top executive recruitment is no longer tied to Party membership, the Party still exerts its influence through key appointments on the board of directors.

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.

Research on the Influence of Strategic Adjustment on Enterprise Performance from The Perspective of Mixed Reform of State-owned Enterprises

In order to effectively solve the problems of low operation efficiency and rigid management system of state-owned enterprises, governments at all levels have actively implemented and practiced mixed ownership reform since 2016, trying to promote industrial optimization and upgrading through mixed reform and stimulate the internal development potential of state-owned enterprises. With the continuous development of the economy and society, the state adopted the three-year Action Plan for SoE Reform (2020-2022) in June 2020, giving guiding opinions and new requirements for further deepening the reform of soes. In this context, to help has not yet been mixed change of state-owned enterprises to better understand the concrete implementation process, Shanxi Fen Wine, for example, starting from the mixed change for, the enterprise mixed change in-depth after expanding brand depth, integrated marketing resources, strengthen scientific research innovation, innovation product strategy, optimize the governance structure of five strategic adjustment direction, and the strategic adjustment of influence on enterprise performance. Finally, it draws enlightenment from the three aspects of path selection of mixed reform, advantage utilization of mixed reform and control of strategic direction, which provides reference for the strategic adjustment of mixed reform of state-owned enterprises in the industry. The research found that Shanxi Fen Wine combined with the advantages of mixed reform and made strategic adjustments around the five aspects of brand, marketing, scientific research, product and governance, which had a positive and positive impact on the financial performance of enterprises.

A study on the impact of the degree of mixed ownership reform of state-owned enterprises on corporate environmental response

Purpose This study aims to explore the relationship between the degree of state-owned enterprises’ (SOEs) mixed reform and the environmental response of enterprises, against the background of actively promoting the reform of mixed ownership in China. Design/methodology/approach The study is conducted on a sample of A-share listed manufacturing companies in Shanghai and Shenzhen of China, investigated for the period 2015 to 2020. The baseline regression results are robust to a series of robustness and endogeneity tests. To deal with the issue of endogeneity, the technique of instrumental variable method has been applied. Findings The study confirms the U-shaped effect of the depth and restriction of mixed ownership on SOEs’ environmentally responsive behaviour in the manufacturing industry, especially for lower environmental regulation and higher level of risk-taking firms. The findings indicate that the government, shareholders and other stakeholders of enterprises should not simply consider that the mixed reform is directly promoting or reducing the environmental response behaviour of enterprises. Practical implications SOEs should improve their shareholding structures to undermine performance enhancement at the expense of the environment and increase environmentally beneficial behaviours. Regulators and governments should improve the institutional mechanism of environmental regulation and make efforts to promote corporate awareness of the environment. Social implications Although the adoption and implementation of environmentally friendly policies are costly, improved environmental response and other social responsibilities are helpful to corporate long-term growth and reputation and obtain more capital market attention. Therefore, firms would benefit from improving their environmental response to protect nature, as well as to enjoy the economic and social benefits of a better environmental response. Originality/value To the best of the authors’ knowledge, there is a lack of studies focussing on the environmental behaviour of SOEs of mixed reform. As the mixed reform in China has come to a climax phase in recent several years, SOEs of mixed reform is an ideal environment for research. The study focusses on manufacturing firms as these firms are more susceptible to contribute to environmental pollution, exploitation of natural resources and labour concerns.

Mixed ownership reform and non-state-owned enterprise innovation: Evidence from China

PurposeThis study examines the impact of China’s mixed-ownership reform on the innovation of non-state-owned acquirers, with a particular focus on the impact on firms with high financing constraints, low-quality accounting information or less tangible assets.Design/methodology/approachWe use a proprietary dataset of firms listed on the Shanghai and Shenzhen Stock Exchanges to investigate the impact of mixed ownership reform on non-state-owned enterprise (non-SOE) innovation. We employ regression analysis to examine the association between mixed ownership reform and firm innovation.FindingsThe study finds that non-state-owned firms can improve innovation by acquiring equity in state-owned enterprises (SOEs) under the reform. Eased financing constraints, lowered financing costs, better access to tax incentives or government subsidies, lowered agency costs, better accounting information quality and more credit loans are underlying the impact. Additionally, cross-ownership connections amongst non-SOE executives and government intervention strengthen the impact, whilst regional marketisation weakens it.Originality/valueThis study adds to the literature on the association between mixed ownership reform and firm innovation by focussing on the conditions under which this impact is stronger. It also sheds light on the policy implications for SOE reforms in emerging economies.

Analysis and Discussion of the Problems in the Process of State-owned Enterprise Reform

Analysis and Discussion of the Problems in the Process of State-owned Enterprise Reform

Governance of nonstate shareholders and short-term debt for long-term investments

ABSTRACT We study the relationship between nonstate shareholder governance and short-term debt for long-term investment of state-owned enterprises in China from 2009 to 2021. Drawing on a novel, hand-collected database, we find that nonstate shareholder governance has a significantly negative effect on short-term debt used for long-term investments. Our study provides a new analytical perspective for maturity mismatch and theoretical support for deepening the reform of state-owned enterprises.

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.

Can private enterprises improve their investment efficiency by participating in the mixed-ownership reform of state-owned enterprises? Evidence from China

ABSTRACT Optimizing investment structure and improving investment efficiency are vital for the development of private enterprises. Using data on China’s A-share private listed companies between 2003 and 2020, we empirically test the impact of participating in the mixed-ownership reform of state-owned enterprises on private enterprises’ investment efficiency. We find that such participation improves private enterprises’ investment efficiency. Mechanism analysis reveals that reducing information asymmetry and easing financing constraints are the main channels for this improvement, showing an ‘information effect’ and a ‘resource effect’. This article provides empirical evidence from Chinese listed companies for the relationship between the mixed-ownership reform of state-owned enterprises and private enterprises’ investment efficiency.

Would behaviors of state-owned enterprises impact the performance of downstream industries in China?

The inefficiency of state-owned enterprises (SOEs) not only affects their own performance but also has implications for downstream enterprises. However, existing literature has not been able to accurately assess the impact of SOEs on the downstream sector. This study presents an innovative approach by combining input-output technologies and econometric models to construct Pair-Weighted Least Square (PWLS) estimations using a dataset of 20,403,924 firm-level pairs. The analysis examines the impact of SOEs on downstream performance and provides evidence of their negative influence as well as the effectiveness of SOEs reform in China. The findings indicate that SOEs have exerted a detrimental effect on downstream performance between 2008 and 2019. Medium-sized SOEs, due to their larger scale and relatively lower regulation, exhibit a particularly negative impact. However, as the reform of SOEs in China has progressed, the negative effect of SOEs on downstream enterprises has gradually diminished. Important factors indicative of SOEs reform, such as efficiency, equity concentration, and scale, play crucial roles in mitigating the harmful effects on the downstream sector. The reform of SOEs in China can offer valuable insights for the reform of state-owned enterprises worldwide.

Research on the Path and Effectiveness of Mixed Ownership Reform of State-Owned Enterprises

The theme of this article is how enterprises carry out Enterprises of the Composite-Ownership System and investigate it from three aspects: development history, reform path, and reform effect. The article argues that a mixed ownership economy is the core content of Chinas economic system, which aims to improve the productivity and competitiveness of Chinese capital and prompt the unified and mutual development of the state-owned economy and private economy. The article reviews the four stages of the revolution from 1978 to today and introduces the characteristics and policy measures of each stage. The article also discusses two main paths of mixed ownership reform: whole listing and private enterprise participation, and analyzes their impact on the financing, governance, brand, innovation and other aspects of state-owned enterprises. The article finally evaluates the effect of the reform, taking some state-owned listed companies and mixed-ownership enterprises as examples, proving that mixed-ownership reform can improve the management productivity and innovation deficiency of enterprises.

Analysis of Employee Incentive Mechanism in State-owned Enterprise Reform and Mixed-ownership Reform: A Case Study of W Corporation

Analysis of Employee Incentive Mechanism in State-owned Enterprise Reform and Mixed-ownership Reform: A Case Study of W Corporation

АНАЛИЗ СОХРАНЕНИЯ И ПОВЫШЕНИЯ СТОИМОСТИ КОРПОРАТИВНЫХ АКТИВОВ В УСЛОВИЯХ ЦИФРОВОЙ ЭКОНОМИКИ

State-owned enterprises are important entities that can effectively guide and promote market development and lay the foundation for social development. State assets are an important prerequisite for the stable operation of state-owned enterprises. In the current environment of continuous development of the digital economy, promoting the preservation and enhancement of the asset value of state-owned enterprises is not only a requirement for the reform and development of state-owned enterprises themselves, but also an important way to give full disclosure to the role of state-owned assets in stabilizing the structure of the state economy and promoting high-quality social development. This article examines state-owned enterprises as the main object of research, paying special attention to the research and analysis of measures to preserve and increase the value of assets of state-owned enterprises in the digital economy.

ГРАНТИ USAID ТА UKAID ДЛЯ ПІДВИЩЕННЯ РІВНЯ ПРОЗОРОСТІ, ЕФЕКТИВНОСТІ ТА КЕРУВАННЯ В УПРАВЛІННІ ДЕРЖАВНИМИ ПІДПРИЄМСТВАМИ УКРАЇНИ

The article examines the possibilities of grant assistance under the SOERA Program, which is financed by the United States Agency for International Development (USAID) in the amount of 100 million US dollars and is implemented by its contractor – the Deloitte company. It is emphasized that for Ukraine such a tool of financial support is relevant in the context of both the implementation of the reform of state-owned enterprises in Ukraine and the involvement of "third sector" organizations in this process, the role of which is important for influencing the authorities in making key decisions. It was emphasized that the SOERA Program provides an opportunity for civil society organizations and educational institutions to receive grants and implement projects that will contribute to increasing the level of transparency, efficiency and management of state-owned enterprises (SOEs) and state assets of Ukraine, in particular, through conducting research, developing methodologies, projects program documents, recommendations, as well as organization of public distribution of developed materials. The objectives of the program were analyzed, the main ones of which are: providing support in creating a comprehensive and effective centralized information system for SEs (data collection and reporting) with the aim of helping the Government and other interested institutions make informed decisions regarding the sale and management of SEs, financial support for the development and implementation of a reform strategy SOE based on factual data and implementation roadmap, improvement of the legislative and regulatory framework to support the implementation of SOE reform and privatization strategy, support for the development by the Government of Ukraine of effective operational management mechanisms for enterprises that remain state-owned, ensuring transparency of SOE corporate management, reducing corruption among them is the reduction of fiscal pressure on state-owned enterprises, promotion of the growth of the private sector and direct foreign investment, and public support for state-owned enterprise reform and privatization. The importance of compliance by the applicant organizations with all criteria of acceptance of the Program and the development of the project according to its recommendations as a condition for making a positive decision on the provision of financing for projects is substantiated. The consequences of the implementation of projects with the financial support of the SOERA Program and their significant impact at the national and subnational levels are summarized.

Reforming State-Owned Enterprises (SOES) to Facilitate the Economic Recovery of Sri Lanka

The economic downturn and escalating debt levels prompted Sri Lanka to seek assistance from the International Monetary Fund (IMF), resulting in the formulation of the 17th IMF program. This program, aimed at fiscal consolidation and restructuring, designates SOEs as a pivotal element in the nation's economic recovery strategy. This policy brief addresses the imperative need for reforming State-Owned Enterprises (SOEs) in Sri Lanka. A historical overview reveals the evolution of Sri Lanka's SOEs, from their establishment during World War II to a surge in numbers in the 1980s. Despite their vital role in the economy, SOEs have faced operational inefficiencies, financial struggles, and governance issues, leading to a privatization policy in 1988. The document explores international experiences in SOE reform, drawing insights from successful models in Singapore, China, and India. Current policy measures in Sri Lanka encompass various reform strategies, such as corporatization, restructuring, and commercialization, focusing on enhancing financial transparency and accountability. The establishment of the State-Owned Enterprise Restructuring Unit (SRU) reflects a commitment to effective implementation, with international support from entities like the International Finance Corporation (IFC). In conclusion, the path to economic recovery in Sri Lanka hinges on the successful transformation of SOEs, ensuring financial viability, transparency, and sustainable growth.

Constructing the foundations of microeconomic analysis of Chinese economics: based on the theory of classified reform of state-owned enterprise

PurposeSince the core issue of Chinese economics is to elucidate the logical relationship between socialism and the market economy, it necessitates a robust foundation for microeconomic analysis to uncover the behavioral patterns and characteristics of microeconomic agents in a socialist market economy and identify the conditions and methods for the functioning of market mechanisms.Design/methodology/approachThe core issue of microeconomics with Chinese characteristics is to identify the economic logic of how market mechanisms play a decisive role in resource allocation under the basic socialist economic system based on China's reform.FindingsThe core issue in building the foundation of microeconomic analysis of Chinese economics is addressing the compatibility issue between SOEs and a market economy.Originality/valueIn the author’s view, this can be achieved under the logic of classified reform so as to build the microeconomic foundation for the effective functioning of a socialist market economy.

On the Change of the Legal Standards for “Public Body” in the WTO Subsidy and Countervailing Agreement

The WTO Agreement on Subsidies and Countervailing Measures (ASCM) defines a subsidy as having four elements, of which the "public body determination criterion" is designed to ascertain whether a state-owned enterprise (SOE) constitutes the subject of a subsidy, and is an important prerequisite for confirming the establishment of a subsidy. However, neither the WTO nor other international organizations have clearly specified this concept. In DS437, one of the points of contention was the criteria for determining a "public body". On 16 June 2019, the WTO published the Appellate Body (AB)'s report, whose explanation of the "public body" determination substantially rejects China's argument and to some extent supports U.S. claim. This ruling shows that the risk of China's SOEs being recognized as public bodies will continue to exist, leaving room for other countries' countervailing agencies to investigate. In this regard, China should further promote the "governmental authority Theory", while continuing to deepen the mixed-ownership reform of SOEs, so as to get out of the predicament of SOEs participating in international competition.

Research on the Influence of Depth and Breadth of Equity Reform on the Performance of State Owned Enterprises Based on Dynamic Panel Data Model

In order to explore the necessity of mixed ownership reform of state-owned enterprises and clarify the direction of mixed ownership reform of state-owned enterprises in China, this paper uses dynamic panel data model and bootstrap-DEA method to study the impact of “depth” and “breadth” of equity reform of state-owned enterprises in China on the performance of state-owned enterprise. The results show that there is an inverted U-shaped relationship between performance and the level of equitable reform of state-owned enterprises. When the depth of equity reform is 36.6%, the performance of mixed reform enterprises is the best. There is a positive U-shaped relationship between the breadth of equity reform and the performance of state-owned enterprises. When the breadth of equity reform is 12.47%, the performance of mixed reform enterprises is the worst. At the same time, it is found that the average performance of the sample enterprises shows an obvious downward trend, while the performance variance of the sample enterprises shows an obvious upward trend, and this trend has not changed significantly after China launched a new round of state-owned enterprise reform in 2015. According to the above research findings, this paper believes that the intervention of government forces is conducive to promoting the survival of the fittest of state-owned enterprises and the overall optimal allocation of social resources, but we should pay attention to the adoption of market-oriented means and should not directly interfere with the mixed reform of state-owned enterprises. At the same time, the mixed reform of state-owned enterprises in China is either relatively thorough, giving up the dominance of the largest state-owned shareholder, giving other shareholders a greater say, or not to carry out mixed reform, or symbolic mixed reform, otherwise it may aggravate the internal friction of the mixed reform state-owned enterprises, resulting in worse performance.

Analysis of Enterprise Merger and Reorganization Based on DCF Valuation Model

Contemporarily, in the process of China economic development, state-owned enterprises have exposed problems such as non-prominent main business and homogenized competition. The new round of state-owned enterprise reform aims to solve these problems, and reasonable evaluation of reformed enterprises is of great practical significance. This paper takes the case of the merger of China Electronics Technology Group Corporation (CETC) and China Potevio as the research object. The DCF valuation model is used to evaluate the enterprise value of the merged CETC, and the enterprise value of China Electronics is 13.77/share. Combined with the financial performance evaluation system of the electronics industry, it is concluded that the reform of state-owned enterprises should pay attention to the relationship between the industrial chain and bring into play the synergistic effect the merger behavior of China Electronics is evaluated, and the merger of China Electronics is successful and beneficial to the development of China electronics industry.