Can minority state ownership influence firm value? Universal and contingency views of its governance effects
AbstractDrawing on the literature of corporate governance and privatization, this study explores the elusive roles of a specific owner identity, namely, state ownership in its minority. With a sample of 68 Taiwanese companies with 5 to 49% state ownership during 1999-2003, the study examines the value-shaping effects of minority state ownership (MSO) and, furthermore, seeks to establish a contingency perspective suggesting that the internal and external contexts may moderate the influence of MSO on firm value. Using first-order autoregressive models to mitigate the problems of endogeneity, the study shows that the governance effect of MSO associates not only in a curvilinear relationship with firm value but also strengthened by corporate ownership ties and market competition. The non-monotonic performance effect and the context-dependent nature of MSO yield significant implications for government investments in the private sector.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Journal of Business Research.
Volume (Year): 64 (2011)
Issue (Month): 8 (August)
Contact details of provider:
Web page: http://www.elsevier.com/locate/jbusres
Corporate governance Privatization Ownership identity Corporate interlocks Market rivalry;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kester, W Carl, 1992. "Industrial Groups as Systems of Contractual Governance," Oxford Review of Economic Policy, Oxford University Press, vol. 8(3), pages 24-44, Autumn.
- Khan, Raihan & Dharwadkar, Ravi & Brandes, Pamela, 2005. "Institutional ownership and CEO compensation: a longitudinal examination," Journal of Business Research, Elsevier, vol. 58(8), pages 1078-1088, August.
- Nickell, Stephen & Nicolitsas, Daphne, 1997. "Wages, restrictive practices and productivity," Labour Economics, Elsevier, vol. 4(3), pages 201-221, September.
- Andrei Shleifer & Robert W. Vishny, 1996.
"A Survey of Corporate Governance,"
NBER Working Papers
5554, National Bureau of Economic Research, Inc.
- Andrei Shleifer & Robert W. Vishny, 1995. "A Survey of Corporate Governance," Harvard Institute of Economic Research Working Papers 1741, Harvard - Institute of Economic Research.
- Julan Du & Yi Dai, 2005. "Ultimate Corporate Ownership Structures and Capital Structures: evidence from East Asian economies," Corporate Governance: An International Review, Wiley Blackwell, vol. 13(1), pages 60-71, 01.
- Lins, Karl V., 2003. "Equity Ownership and Firm Value in Emerging Markets," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 38(01), pages 159-184, March.
- Ha-Joon Chang & Ajit Singh, 1997. "POLICY ARENA: Can Large Firms Be Run Efficiently Without Being Bureaucratic?," Journal of International Development, John Wiley & Sons, Ltd., vol. 9(6), pages 865-875.
- Oliver Hart & Andrei Shleifer & Robert W. Vishny, 1996.
"The Proper Scope of Government: Theory and an Application to Prisons,"
NBER Working Papers
5744, National Bureau of Economic Research, Inc.
- Hart, Oliver & Shleifer, Andrei & Vishny, Robert W, 1997. "The Proper Scope of Government: Theory and an Application to Prisons," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1127-61, November.
- Oliver Hart & Andrei Shleifer & Robert Vishny, 1996. "The Proper Scope of Government: Theory and an Application to Prisons," Harvard Institute of Economic Research Working Papers 1778, Harvard - Institute of Economic Research.
- Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer, 1998.
"Corporate Ownership Around the World,"
NBER Working Papers
6625, National Bureau of Economic Research, Inc.
- Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 1998. "Corporate Ownership Around the World," Harvard Institute of Economic Research Working Papers 1840, Harvard - Institute of Economic Research.
- Hart, Oliver, 1995. "Corporate Governance: Some Theory and Implications," Economic Journal, Royal Economic Society, vol. 105(430), pages 678-89, May.
- Michael C. Jensen, 2010.
"The Modern Industrial Revolution, Exit, and the Failure of Internal Control Systems,"
Journal of Applied Corporate Finance,
Morgan Stanley, vol. 22(1), pages 43-58.
- Michael C. Jensen, 1994. "The Modern Industrial Revolution, Exit, And The Failure Of Internal Control Systems," Journal of Applied Corporate Finance, Morgan Stanley, vol. 6(4), pages 4-23.
- Jensen, Michael C, 1993. " The Modern Industrial Revolution, Exit, and the Failure of Internal Control Systems," Journal of Finance, American Finance Association, vol. 48(3), pages 831-80, July.
- Januszewski, Silke I. & Koke, Jens & Winter, Joachim K., 2002.
"Product market competition, corporate governance and firm performance: an empirical analysis for Germany,"
Research in Economics,
Elsevier, vol. 56(3), pages 299-332, September.
- Januszewski, Silke I. & Köke, Jens & Winter, Joachim K., 1999. "Product market competition, corporate governance and firm performance: an empirical analysis for Germany," ZEW Discussion Papers 99-63, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Denis, Diane K. & McConnell, John J., 2003. "International Corporate Governance," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 38(01), pages 1-36, March.
- Nalebuff, Barry J & Stiglitz, Joseph E, 1983. "Information, Competition, and Markets," American Economic Review, American Economic Association, vol. 73(2), pages 278-83, May.
- Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, January.
- Jeffry M. Netter & William L. Megginson, 2001. "From State to Market: A Survey of Empirical Studies on Privatization," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 321-389, June.
- Fama, Eugene F & Jensen, Michael C, 1983. "Separation of Ownership and Control," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 301-25, June.
- Denis, Diane K., 2001. "Twenty-five years of corporate governance research ... and counting," Review of Financial Economics, Elsevier, vol. 10(3), pages 191-212.
- John Vickers & George Yarrow, 1991. "Economic Perspectives on Privatization," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 111-132, Spring.
- Gugler, Klaus & Yurtoglu, B. Burcin, 2003. "Corporate governance and dividend pay-out policy in Germany," European Economic Review, Elsevier, vol. 47(4), pages 731-758, August.
- Stijn Claessens & Simeon Djankov & Joseph P. H. Fan & Larry H. P. Lang, 2002. "Disentangling the Incentive and Entrenchment Effects of Large Shareholdings," Journal of Finance, American Finance Association, vol. 57(6), pages 2741-2771, December.
- Sanghoon Ahn, 2002. "Competition, Innovation and Productivity Growth: A Review of Theory and Evidence," OECD Economics Department Working Papers 317, OECD Publishing.
- Anderson, James H & Lee, Young & Murrell, Peter, 2000. "Competition and Privatization Amidst Weak Institutions: Evidence from Mongolia," Economic Inquiry, Western Economic Association International, vol. 38(4), pages 527-49, October.
- Bennett, John & Maw, James, 2003. "Privatization, partial state ownership, and competition," Journal of Comparative Economics, Elsevier, vol. 31(1), pages 58-74, March.
- Carney, Richard W. & Liu, Wai-Man (Raymond) & Ngo, Phong T. H., 2012. "Responding to Financial Crisis: The Rise of State Ownership and Implications for Firm Performance," MPRA Paper 43600, University Library of Munich, Germany.
- Baños-Caballero, Sonia & García-Teruel, Pedro J. & Martínez-Solano, Pedro, 2014. "Working capital management, corporate performance, and financial constraints," Journal of Business Research, Elsevier, vol. 67(3), pages 332-338.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.