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Personnel Power: Governing State-Owned Enterprises

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  • Leutert, Wendy
  • Vortherms, Samantha A.

Abstract

State-owned enterprises (SOEs) retain a strong presence in many economies around the world. How do governments manage these firms given their dual economic and political nature? Many states use authority over executive appointments as a key means of governing SOEs. We analyze the nature of this “personnel power” by assessing patterns in SOE leaders’ political mobility in China, the country with the largest state-owned sector. Using logit and multinomial models on an original dataset of central SOE leaders’ attributes and company information from 2003 to 2017, we measure the effects of economic performance and political connectedness on leaders’ likelihood of staying in power. We find that leaders of well-performing firms and those with patronage ties to elites in charge of their evaluation are more likely to stay in office. These findings suggest that states can leverage personnel power in pursuit of economic and political stability when SOE management is highly politically integrated.

Suggested Citation

  • Leutert, Wendy & Vortherms, Samantha A., 2021. "Personnel Power: Governing State-Owned Enterprises," Business and Politics, Cambridge University Press, vol. 23(3), pages 419-437, September.
    • Handle: RePEc:cup:buspol:v:23:y:2021:i:3:p:419-437_7
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    Cited by:

    1. Feng, Yitian, 2023. "Do listed companies fulfill their public commitments? Evidence from the stake-raising commitments of Chinese companies," Pacific-Basin Finance Journal, Elsevier, vol. 77(C).
    2. Lo, Dic & Gao, Ling & Lin, Yuchen, 2022. "State ownership and innovations: Lessons from the mixed-ownership reforms of China's listed companies," Structural Change and Economic Dynamics, Elsevier, vol. 60(C), pages 302-314.

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