IDEAS home Printed from https://ideas.repec.org/p/eab/wpaper/23338.html
   My bibliography  Save this paper

Governance role of secondary shareholders : A study of Chinese outward foreign direct investment

Author

Listed:
  • Lin Cui

    (RESEARCH SCHOOL OF MANAGEMENT)

Abstract

This study examines the effects of institutional and foreign ownership on the outward foreign direct investment (FDI) of Chinese firms. Based on agency theory and the resource-based view, we argue that secondary shareholders, i.e., institutional and foreign shareholders, are active and effective governance forces in Chinese firms. They promote and support Chinese firms to engage in outward FDI through their monitoring and resource roles. Their governance effect, however, may be hindered by the power of CEOs as a result of principalprincipal conflicts. Our empirical study of 224 Chinese listed firms revealed that institutional and foreign ownership is positively associated with the outward FDI propensity of Chinese firms. The positive relationship between institutional ownership and outward FDI propensity weakens when CEO power increases. There was, however, no support for the moderating effect of CEO power on the relationship between foreign ownership and outward FDI propensity.

Suggested Citation

  • Lin Cui, 2012. "Governance role of secondary shareholders : A study of Chinese outward foreign direct investment," EABER Working Papers 23338, East Asian Bureau of Economic Research.
    • Handle: RePEc:eab:wpaper:23338
    as

    Download full text from publisher

    File URL: http://www.eaber.org/node/23338
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Chinese firms; Agency Theory; Foreign Ownership; Institutional Ownership; Outward foreign direct investment; Resource-based View; Chinese ODI;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eab:wpaper:23338. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Shiro Armstrong (email available below). General contact details of provider: https://edirc.repec.org/data/eaberau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.