Ownership Restructuring Research Articles

A four layered R&D efficiency scan in the pharmaceutical industry: Evaluating ownership restructuring

The key rationale of linking restructuring with efficiency deliberates upon the use of resources and skills after such restructuring. The empirical analysis in the present research facilitates in testing four hypotheses- validation of cobb-Douglas production function, absence of technical inefficiency effects, the impact of the explanatory variable, absence of hicks-neutral technical change and absence of technical progress. A second level analysis wherein an explanatory variable viz., research & development and comprehending its impact on efficiency post ownership change is also done. Additionally, the study is deepened by understanding the presence of bias in decision making post ownership change. This research extends to developing patents in the field of medicines which is one of the many dimensions where Indian Pharmaceutical Industry (IPI) needs encouragement. Furthermore, relatively unexplored areas of medicine like complex generics and biosimilars can promote IPI on the international platform due to limited competition and greater margins in this novel field.

DYNAMICS OF THE YIELD OF WINTER WHEAT WITHIN THE BOUNDARIES OF THE VOLYN OBLAST

The problem of the lack of a perfect informational, regulatory and organizational-functional system that would regulate and ensure the scientifically based use of land in the conditions of agricultural reform, restructuring of land ownership, and the emergence of many new land users and landowners, increasing competition for land resources due to urbanization transport, other non-agricultural use is an urgent problem in Ukraine. It was investigated that the yield level of winter wheat within the Volyn region fluctuates almost one and a half times, which is caused by the heterogeneity of the soil and climatic conditions of the region. The general yield levels of winter wheat were established: it is the largest for cluster 1 (Forest-steppe zone), the smallest - for cluster 2 (Polyssia) and has an intermediate value for cluster 2 (transition zone). The approach of the specific yield of cluster 3 to the zero level emphasizes the stable transitional nature of the corresponding space within the Volyn region. After 2000, the rate of yield growth within Polissia began to rapidly decrease compared to the rate of growth of winter wheat yield in the Forest Steppe, so the share in the total yield in the region became smaller in Polissia. Variability in time of winter wheat yield is the smallest in the south and center of the region, and the largest in the north, east and west. The presence of asymmetry indicates the heterogeneity of winter wheat yield conditions and regimes during the research period and the possibility of establishing qualitatively homogeneous time intervals, i.e., the periodization of the studied time according to winter wheat yield indicators. The asymmetry of the distribution is also accompanied by its two peaks (there is a strong positive correlation between asymmetry and kurtosis r = 0.95, p < 0.001). Such results emphasize the presence of heterogeneous periods in the temporal yield of winter wheat during the research period. Periodization by types of winter wheat yield dynamics established that in periods 1 and 2 it was synchronous in all spatial clusters, and in the third period there was a differentiation of yield growth rates. It is the largest in the forest-steppe zone, the smallest in Polissia, and in the transition zone, the growth rate has an intermediate value.

Endowment Structure, property rights and reforms of large state-owned enterprises (SOEs) in China: Past, present and future

Based on the criteria of the factor endowment structure of state-owned enterprise (SOE) sectors in China between 1980 and 2018, this paper rationalizes the classified reforming of China's state sectors by constructing a Nash bargaining model to capture the dynamics of ownership restructuring, and the reduction process of policy burden on SOEs. We reveal that the interplay between policy burden bared by SOEs and the ownership restructuring process largely depends upon their factor intensities since the reform period in the 1980s. Our model identifies two Ownership Reform Irrelevance Points (ORIP), which serve as the benchmark for the dynamics of the ownership restructuring process of China's large SOEs, which saw them move from ‘mixed-ownership’ to ‘privatization’. ORIPs demonstrate the need for a reduction in social policy burdens with regards to the state sector's comparative advantage of factor endowment structure through SOE ownership restructuring. This study theoretically analyzes existing literatures on the classified reforms of China's state sectors from 1978 to 2018. This study is the first to base such an analysis on the criteria of factor endowment structure focusing on the connection between the policy burdens bared by SOEs and their ownership restructuring process.

A Strategyproof Mechanism for Ownership Restructuring in Privately Owned Assets

A Strategyproof Mechanism for Ownership Restructuring in Privately Owned Assets

The reversal of privatization in China: A political economy perspective

We document reversals of privatization in China—local governments re-possessing ownership stakes in a quarter of previously privatized firms during 1998–2007, a period when the privatization process was still ongoing. This type of ownership restructuring helped ease the unemployment burden in the local labor markets, and was more likely to occur in firms located in provinces led by an official without strong political status in the Chinese Communist Party. A reversal in privatization led to higher leverage, lower profitability and lower labor productivity. Our paper sheds light on how frictions in the political structure affect the implementation of economic policies in a top-down system.

Impact of Ownership Restructuring to Financial Performance of Vietnamese Commercial Banks

This paper examines the impact of ownership restructuring on the financial performance of 28 commercial banks in Vietnam from 2008 to 2018. The results of the study show that: increasing the variables: equity ownership, foreign ownership ratio, concentration of ownership, privatization of state banks, economic growth increases financial performance. However, mergers and acquisitions, increasing state ownership and inflation reduce financial performance.

Board independence and Chinese banking efficiency: a moderating role of ownership restructuring

This study investigates how Chinese banking sector reforms have affected the relationship between banking performance and bank board structure. The study analyzes data from listed commercial Chinese banks between 2000 and 2013, and banking efficiency scores are estimated using the stochastic frontier approach (SFA) and data envelopment analysis (DEA). The impact of board structure and structural reforms on banking efficiency is further analyzed using panel data regression. We find that board independence has a negative influence on banking efficiency, but it becomes positive when the banks are listed on the stock market. This finding confirms the soft-budget constraint theory, which holds that large banks are less efficient than smaller ones as the former can more easily obtain financial support during times of distress. Further, the listing of state-owned banks positively moderates the relationship between board independence and banking efficiency. The study contributes to the literature on banking reforms, board structure, and banking efficiency. It confirms the theoretical basis for Chinese banking reforms and that banking efficiency has improved since the ownership restructuring.

Turkey’s communicative authoritarianism

The majority of current political communication studies focus on discursive dimensions of communications and disregard how communications partake in the governing of populations through economic, material and institutional practices. By focusing on Turkey’s case, here I move beyond this approach and examine the role of communications in the development of neoliberal capital accumulation, authoritarian welfare politics, political repression and the production of popular support. The article provides an empirical analysis of policy developments and plans and the restructuring of ownership and control of networks between 2002 and 2016 in Erdoğan’s Turkey.

The wage-productivity nexus in the world factory economy

This paper highlights new findings on the wage-productivity nexus in the World Factory Economy. After presenting the long-run macro-elasticity characterizing the phase of Chinese economic development since the eighties, we look at the wage-productivity nexus from a micro level perspective using a detailed firm-level dataset covering the period of ownership restructuring (1998–2007). A few results are quite robust under different estimation strategies. First, throughout the impressive Chinese economic miracle, elasticities of real wages to productivities – that is the ratios of rates of variation of the former to the latter – are always positive both under pooled and longitudinal estimates, both at firm- and sectoral-levels. Second, such elasticities are dramatically low, and falling in many distinct phases since the late seventies. That is, even in the manufacturing sector, the distribution of gains from the impressive labour productivity growth appears to be markedly uneven. Finally, third, governance institutions seem to matter a lot, with the majority of ownership types exhibiting firm-specific wage determination processes. The low elasticities of wages to productivity are plausibly the consequence of the massive flow of migrant workers from the rural areas to the coasts, somewhat resembling the early phase of the English Industrial Revolution with the pattern of enclosure in the country-side and massive migrations to the industrial towns.

Options for the restructuring of state ownership of South African Airways

Background: South Africa adopted an economic policy that included both deregulation and privatisation in line with the 1980s’ global trends. Economic deregulation of the domestic air transport market was implemented in 1991 and partial privatisation of South African Airways (SAA) 8 years later, in 1999. This was reversed in 2002. SAA’s poor financial performance since 2012, its insolvency and future funding needs resulted in mixed messages on the future ownership of SAA. Since 2004 the policy of full ownership of state-owned enterprises (SOEs) ruled out SAA’s privatisation. SAA’s escalating losses prompted the Minister of Finance and National Treasury to favour the introduction of a strategic equity partner (SEP) to invest in a minority shareholding in SAA. Objectives: This article examined options for the restructuring of state ownership of state-owned airlines in South Africa. Method: Contemporary privatisation trends and the level of state ownership of airlines in Europe and elsewhere were identified. The preferred methods of airline privatisation and their economic benefits were determined. Results: Contrary to the freeze of privatisation in South Africa, increased trends in privatisation were identified elsewhere. In particular, share issue privatisations (SIPs) on listed securities exchanges were favoured to SEPs. South African Airways’ financial circumstances demonstrate the need to eliminate SAA’s losses and to resolve its insolvency. Conclusion: The South African official definition of privatisation needs to be broadened to include SIP instead of being limited to the sale of shares in SAA. The SIP method of privatisation is ideally suited to resolve SAA’s capitalisation and subject SAA to market and regulatory disciplines.

Entrepreneurship in China and India

Research to date has not explored that the role of entrepreneurship has a key driver of China’s economic growth and how the nature of entrepreneurship may differ between India and China in this context. This difference will have implications on the extent of entrepreneurship as a driver of Indian economic growth. The aim of this paper is to fill this research gap. Furthermore, one of the central premises of this paper is that the economic reforms in China have provided an incentive for the Chinese to embrace their uniquely cultural entrepreneurial skills. However, this has not happened in isolation because the reforms have targeted all sectors of the economy; the most important of these reforms for entrepreneurial facilitation has been associated with infrastructure, education, property rights, ownership restructuring and foreign direct investment. In this case, changes in infrastructure, knowledge creation and knowledge spillovers have led indirectly to China’s economic growth. This is because knowledge spillovers have been facilitated by entrepreneurship. Moreover, this process has been characterised by the dynamic nature of institutional change in China. Nevertheless, in India at state level, there is variation in the level of economic, institutional and infrastructural development. Furthermore, there is also a tendency for firms in India to remain small. This may be due to the country’s rigid labour laws. The findings of this paper indicate that entrepreneurship is stronger in China than in India from an economic, cultural and a historical perspective. Private entrepreneurship has been stimulated in China by the incrementally evolving economic reforms which resulted in the dynamic nature of institution formation. However, private entrepreneurship in India remains constrained by institutional factors and institutional rigidity. Nevertheless, social entrepreneurship is more prevalent in India than in China.

Bring institutions into FDI spillover research: Exploring the impact of ownership restructuring and institutional development in emerging economies

Extant studies exploring the influences of foreign direct investment (FDI) spillovers on the productivity of local firms have provided conflicting evidence. In particular, they have largely overlooked the important role of institutional mechanisms in the host market in understanding the sources of the variation in FDI spillover effects on the productivity of local firms, especially in the context of emerging markets. Using a comprehensive panel data set of manufacturing firms in China during 1998–2007, our paper presents an integrative framework of how FDI spillovers affect the productivity of local firms in emerging markets. We identify an inverted U-shaped relationship between FDI spillovers and the productivity of local firms in China. This result suggests the coexistence of and the interplay between the opposing mechanisms of FDI spillover learning opportunity and adverse competition. Drawing on the institution-based view, this study also develops contingency frameworks and arguments to explore the question of if FDI spillover effects are contingent on, or independent of, a local institutional context especially in emerging markets. We find that institutional mechanisms, such as the institutionally determined ownership restructuring and the different levels of subnational institutional development within the host emerging market, significantly shape the variation of FDI spillover effects on the productivity of local firms. This research highlights the importance of incorporating institutional effects in understanding the FDI spillover effects in emerging markets.

The Borders Beneath: On Pipelines and Resource Sovereignty

The very phrase “modern Middle East” conjures images of military conflict, terrorism, sectarianism, and oil, yet most observers tend to separate the history of Western oil consumption from Middle Eastern wars or dismiss the whole business as wars for oil. This essay argues that the claims staked by Western oil companies to the entire subterranean sphere involved a configuration of sovereignty in which the states in question were alienated from the resources of value. This hollow form of sovereignty had corollaries on the territorial level where oil companies promoted sectarianism and its militarization. On this count, I modify Timothy Mitchell's thesis in Carbon Democracy that the militarization of the Middle East was a largely American solution to lost profits following the nationalization of oil by producing countries (insofar as lost oil profits were recuperated through weapons sales), arguing instead that militarization was a strategy simultaneous with the development of oil concessions. Subsequent nationalization of the concessions involved the absorption of ethnic competition and militarized space into the very fabric of the nation-state. In the current embattled context, a nascent form of resource sovereignty operates in Iraqi Kurdistan where the Kurdistan Regional Government funds the Peshmerga with proceeds from its independent oil sales. Although a successful, long-term outcome of resource sovereignty depends on the dissolution of another colonial holdover, namely, claims based on ethnicity, the Kurdish restructuring of oil ownership marks the first step in dissolving the enduring legacies of colonial administration, authoritarian governments, and systematic militarization.

Who brings the heat? – From municipal to diversified ownership in the Swedish district heating market post-liberalization

District heating in Sweden has undergone changes in recent decades. Parallel with transition towards sustainability, a considerable ownership restructuring has occurred, due to liberalization of energy markets. The aim of this paper is to describe and analyze trends of mergers and acquisitions in the Swedish district heating market. A systematic review of ownership in 290 municipalities has been performed through annual reports, press releases, websites, municipal minutes, newspaper articles and personal contacts. The paper shows a transformation from municipal to diverse ownership, decreased municipal ownership and increased internationalization. The window of opportunity provided by liberalization was used especially by the “big three” (E.ON, Fortum and Vattenfall) in order to strengthen market position early in the wave of acquisitions. The time period 1996–2005 was especially hectic, showing strategies of cherry picking hot spots for acquisitions, with the “big three” being responsible for a large proportion of these. The period after 2006 showed trends of companies selling several district heating businesses at once, through large-scale disinvestment. The paper shows a transformation of the district heating regime, first as a reaction to changes on the electricity market and later in its own right, raising concerns regarding the weak position of customers.

Contested confines: political risk and the media in South Africa

The South African private news media industry represents a substantial portion of the overall media industry and the most successful in terms of profit acquired. It is critical however to assess the shareholders and private ownership of the news media industry in order to determine the likely success of investment in this industry. However, additional risk factors need to be considered along with the shareholders and ownership; macro factors such as, legislation and economic stability as well as micro factors such as the restructuring of ownership and transparency within the industry. It is also fundamental that the news media industry of South Africa is assessed through the lens of its historical landscape and transformation and its Fourth Estate responsibilities. Through this assessment it is possible to conclude three likely outcomes of investment in the news media industry. These outcomes are based on the measured growth and current stability of the industry and the South African economy. The most concerning risk for investment is the continued economic downturn of the South African economy and its effect on restructuring of media ownership and a declining profit. This can be coupled with the risk of legislative turnover and executive overreach within the news media industry

Survival prediction of distressed firms: evidence from the Chinese special treatment firms

ABSTRACTIn the Chinese stock market, firms experiencing financial distress have been imposed on a Special Treatment (ST) cap by the China Securities Regulatory Commission. Using a sample of 441 ST firms tracked from 1998 to 2011, this paper employs a Cox proportional hazards model to predict turnaround probability for a distressed firm to remove the ST cap. The predictor variables incorporate (1) accounting-driven ratios, (2) market-driven variables, and (3) information on ownership structure and restructuring status throughout the process. In contrast to previous distress studies, this paper finds that market variables do not add predictive power to the model when combined with accounting variables. Also, incorporating the time effect, the results show that the survivor function for an ST firm's survival is negatively related to the duration, and that the Cox hazards model outperforms the logit model in the out-of-sample forecast.

Ownership restructuring and wage inequality in urban China

AbstractUrban income inequality is an increasingly important driver of China's overall income inequality. Using three urban household surveys for 1995, 2002 and 2007, the authors examine how change in enterprise ownership structure – one of the major features of China's economic transition – has contributed to widening urban wage inequality. While wage dispersion was higher in the private sector over the period 1995–2007, it increased faster in the public sector. However, over 50 per cent of the increase in urban wage inequality is associated with labour reallocation from the public to the private sector. Urban wage inequality may thus widen further if more labour is reallocated to the private sector.

Limits of VoC and institutional complementarities in the semi-periphery: comparative analysis of reforms in Brazil and India

In VoC theories, adopted in OECD countries, the state does not fulfill an important role in the productive system. On the other hand, by analyzing the trajectory of the semi-periphery countries, there is no way to describe the mechanisms of institutional complementarity without holding the state in the center of the model. That’s the trajectories of Brazil and India. To evaluate the role of the state as a strategic actor in semiperipheral institutional complementarity this proposal suggests analyze the role of the state in the commanding heights of economic liberalization. In particular, the role of public banks and pension funds as anti-cyclical and coordinators actors of the new corporate ownership restructuring and external insertion adopted by large conglomerates in Brasil and India in the past ten years. Understanding this is crucial to point out the limits of theories of varieties of capitalism, providing assistance to expand its analytical scope.

The Impact on the Ownership Restructuring of the Labour Force Occupation in Romania

This article aims to catch some aspects regarding the evolution of Romanian labour force occupation in the last 24 years in the context of ownership restructuring. In Romania, this process proved to be a particular problem, with major impact in all areas such as economic, social, environmental, cultural, education. The ownership restructuring process results were the basic premise of the acknowledgement of market economy in Romania, of the market and its mechanisms. The transition from a centralized, planned economy based on control principles to an economy based on market principles meant radical changes of the entire inherited building structures, thus on the labour force occupation. Once Romania joined the European Union, we had to get in line with the European standards and social policies, the first steps requiring the abandon of the social clauses included in the shares selling contracts of the Romanian state-owned companies.We will try to analyze what were the effects of ownership restructuring over the economic activities of privatized companies, if the maintenance of social clauses lead to labour force distortion with effects on the labour force occupation, to a deficiency in implementing effectiveness in economic activities or even business closures.

Fixed-Term Employment During Transition

:In this study, we analyze the factors affecting fixed-term employment in Croatia during the period between 1998 and 2007 for 54 economic activities. This period was characterized by processes that are typical of economic transition in Central and Eastern Europe: large ownership restructuring and private sector liberalization and development, increasing trade openness, large inflows of foreign direct investment, and labor legislation reforms affecting employment protection. In addition to these changes, we control for economic conditions and the sectoral composition of employment with respect to the demographic characteristics of employees. Our results show that the share of fixed-term employees is higher in sectors with higher employment growth and a larger share of young and female workers, as well as in economic activities that are open to international trade. Sectors with a larger share of workers with a university degree have a smaller share of employees with fixed-term contracts. Somewhat surprisingly, there is no significant correlation between fixed-term employment share and ownership type (private, state owned, or entities in mixed ownership), including foreign ownership. We do not find any significant effects that could reliably be attributed to labor market legislation reform.