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State ownership and market orientation in China's public firms: An agency theory perspective

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  • Song, Jing
  • Wang, Rui
  • Cavusgil, Salih Tamer

Abstract

In China, an increasing number of state-owned firms have gone public, which suggests a dual-principal phenomenon such that firms are owned by both the government and non-state shareholders. Non-state shareholders tend to focus on the firm's market orientation and performance, while state shareholders seek political goals over profit-maximization. This manuscript attempts to investigate this issue based on agency theory with both qualitative and quantitative studies. Our findings suggest that state-controlled public firms indeed exhibit a lower degree of market orientation than privately controlled public firms in China, and that the firm's market orientation is relatively high when firm ownership is concentrated in the hands of non-state shareholders.

Suggested Citation

  • Song, Jing & Wang, Rui & Cavusgil, Salih Tamer, 2015. "State ownership and market orientation in China's public firms: An agency theory perspective," International Business Review, Elsevier, vol. 24(4), pages 690-699.
    • Handle: RePEc:eee:iburev:v:24:y:2015:i:4:p:690-699
    DOI: 10.1016/j.ibusrev.2014.12.003
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    5. Glavas, Dejan & Bancel, Franck, 2018. "Are Agency Problems a Determinant of Green Bond Issuance?," MPRA Paper 88377, University Library of Munich, Germany.
    6. Bao, Shuji Rosey & Lewellyn, Krista B., 2017. "Ownership structure and earnings management in emerging markets—An institutionalized agency perspective," International Business Review, Elsevier, vol. 26(5), pages 828-838.
    7. Monika Kansal & Nava Subramaniam & Shekar Babu & Suresh Mony, 2020. "CSR in Government-Owned Enterprises in India: A Principal–Agent Perspective," CSR, Sustainability, Ethics & Governance, in: Bodo B. Schlegelmilch & Ilona Szőcs (ed.), Rethinking Business Responsibility in a Global Context, pages 219-236, Springer.
    8. Halilu Bello Rogo & Halilu Bello Rogo & Mohd Noor Mohd. Shariff & Muhammad Haroon Hafeez, 2017. "Moderating Effect of Access to Finance on the Relationship between Total Quality Management, Market Orientation and Small and Medium Enterprises Performance: A Proposed Framework," International Review of Management and Marketing, Econjournals, vol. 7(1), pages 119-127.
    9. Huang, Yuanyuan & Xie, En & Li, Yu & Reddy, K.S., 2017. "Does state ownership facilitate outward FDI of Chinese SOEs? Institutional development, market competition, and the logic of interdependence between governments and SOEs," International Business Review, Elsevier, vol. 26(1), pages 176-188.

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