What is it about?
China’s socio-political institutions create state-owned corporate empires with unique agency conflicts when increased state ownership drives higher management expenses and lower firm profitability though empire building. Long-term debt is used to finance empire building, while foreign capital investments and innovativeness can mitigate these agency conflicts.
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Why is it important?
How empire building mediates the relationship between state ownership and performance in China?
Read the Original
This page is a summary of: Unfolding China’s state-owned corporate empires and mitigating agency hazards: Effects of foreign investments and innovativeness, Journal of World Business, April 2019, Elsevier, DOI: 10.1016/j.jwb.2019.02.001.
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