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Managerial ownership and the role of privatization in transition economies: The case of China.

Authors :
Wang, Liu
Judge, William
Source :
Asia Pacific Journal of Management; Jun2012, Vol. 29 Issue 2, p479-498, 20p, 1 Diagram, 5 Charts
Publication Year :
2012

Abstract

Within transition economies, a popular tactic for revitalizing large and inefficient stateowned enterprises (SOEs) is to privatize them. Unfortunately, the empirical evidence related to this issue is equivocal. This study, therefore, explores more deeply what the relationship may be between privatization efforts of SOEs and their financial performance in transition economies. Specifically, we seek to better understand whether privatization reforms per se, or other corporate governance mechanisms that complement or substitute for this effort, are most effective. Using a panel sample of Chinese state-owned public firms over an eight year period from 1999 to 2006, we find that managerial ownership has a more significant impact on firm performance than privatization does. This finding suggests that internal incentives to managers may be more effective than external market mechanisms in economies transitioning from centralized planning to market control. Our results are robust using a wide variety of performance measures and different model specifications. [ABSTRACT FROM AUTHOR]

Details

Language :
English
ISSN :
02174561
Volume :
29
Issue :
2
Database :
Complementary Index
Journal :
Asia Pacific Journal of Management
Publication Type :
Academic Journal
Accession number :
75522811
Full Text :
https://doi.org/10.1007/s10490-010-9205-9