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Principal‐principal conflicts under weak institutions: A study of corporate takeovers in China

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  • Jiatao Li
  • Cuili Qian

Abstract

The principal‐principal perspective is tested and extended in the context of corporate takeovers of Chinese publicly listed firms from 1998 to 2007. The resistance of a target firm's controlling shareholder toward potential takeovers reflects the conflict between the principal and minority shareholders. It was found that this resistance weakens when target firms are located in regions with more institutional development, where the minority shareholders' interests are better protected. The resistance also decreases for target firms with CEOs who are politically connected, as these CEOs may be more interested in their own political careers than in representing the interests of the controlling shareholders.Copyright © 2012 John Wiley & Sons, Ltd.

Suggested Citation

  • Jiatao Li & Cuili Qian, 2013. "Principal‐principal conflicts under weak institutions: A study of corporate takeovers in China," Strategic Management Journal, Wiley Blackwell, vol. 34(4), pages 498-508, April.
    • Handle: RePEc:bla:stratm:v:34:y:2013:i:4:p:498-508
    DOI: 10.1002/smj.2027
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    1. Fei Tang & Dayuan Li, 2024. "Are female CEOs greener? Female CEOs and green innovation: The role of their political embeddedness," Business Ethics, the Environment & Responsibility, John Wiley & Sons, Ltd., vol. 33(4), pages 633-648, October.
    2. Xiaohong Ma & Yongmei Cui & Linlin Zhang & Hui Zhou, 2026. "Gambling Attitudes and Earnout Contracting in M&A Transactions: Evidence From China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 66(2), pages 1800-1832, June.
    3. Dong, Yusen & Li, Donghong & Ma, Pengcheng & Choi, Yoona, 2025. "Investee peer effect on firm Innovation: An uncertainty-reduction perspective," Technovation, Elsevier, vol. 146(C).
    4. Zhang, Ningning & Wen, Ke & Guo, Jingjing & You, Dingyi & Tang, Le, 2026. "Proximity and cross-regional academia-industry collaboration: The moderating role of regional government support," Technological Forecasting and Social Change, Elsevier, vol. 225(C).
    5. Chenguang Hu & Kyung Hwan Yun, 2025. "Blockholder rent appropriation and CEO compensation in an emerging economy: an examination of three types of blockholder–CEO relationships," Asia Pacific Journal of Management, Springer, vol. 42(3), pages 1517-1563, September.

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