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A great deal of prior literature on corporate governance in China has asserted that state-owned enterprises (SOEs) are inefficiently run and badly governed—either worse than privately-owned enterprises (POEs) or just as bad. There is, however, no solid empirical evidence that underpins either claim. Using a unique, hand-coded dataset on corporate charter provisions with a random sample of nearly 300 publicly listed Chinese firms, this paper demonstrates that political hierarchy, state shareholding level, and political compliance are key factors in the governance and performance of Chinese SOEs. The corporate governance of SOEs that are firmly controlled by the Chinese central government favours minority shareholders, whereas that of SOEs firmly controlled by provincial governments appears to be less protective of them. Overall, SOEs, particularly those controlled by the central government, do not perform any worse than POEs, as measured by Tobin's Q. Nonetheless, more politically compliant firms do perform worse. [ABSTRACT FROM AUTHOR]

In recent years many municipal governments have been delegating services to autonomous municipally owned enterprises. Notions of accountability alter the autonomy of these entities which are governed by private law. The single case study of the City of Potsdam (Germany) serves as a longitudinal comparison that isolates the effect of media attention on prevailing accountability systems over time. The case findings support agenda- setting theory. Media attention to compliance failure was related to a change of board structures, and new guidelines on compliance and sponsorship. [ABSTRACT FROM AUTHOR]

Empirical studies show that ownership structures that separate control and cash flow rights create agency problems and are associated with reduced value for minority shareholders. Institutional investors recognise these inefficiencies and expect a discount on the share price of companies with control-enhancing mechanisms like multiple voting rights shares or pyramidal ownership structures.In the US, corporate pyramids are discouraged through the taxation of inter-company dividends, whereas multiple voting rights shares are allowed but have to be issued before the firm goes public. Therefore, controlling shareholders who want to entrench themselves in control by retaining multiple voting rights shares pay the costs of this inefficient capital structure when the firm initially goes public at a discounted price.Some European countries – including Spain, Portugal, Greece and, until very recently, Italy – have adopted a diametrically opposite solution. Multiple voting rights shares have been expressly prohibited by the legislator, but corporate pyramids are commonly used by listed companies and can be created following the IPO of the firm without approval from the shareholders. In this situation, if institutional investors expect that a pyramidal ownership structure will be created in the future, they will discount the price of the shares when the firm goes public. Therefore, if Italy, Spain, Portugal and Greece are willing to privatise some of their state-owned companies and want to maximise the price of their stocks, they should create the conditions to assure the market that these companies will not be controlled through pyramids in the future.Because of strong opposition from national business elites which control the largest corporate groups, it is very difficult to adopt strict regulations aimed at prohibiting - or at least limiting - the use of pyramidal ownership structures in a relatively short period of time. In order to solve this Olson problem, I suggest that Italy, Spain, Portugal and Greece should use regulatory dualism to create new markets with enhanced corporate governance rules that prevent shareholders' control through pyramids. [ABSTRACT FROM AUTHOR]