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Non-state Shareholders Board Power, Board Deep-level Faultlines and Acquisition Decisions by State-owned Enterprises in China

Author

Listed:
  • Ning Wang
  • Hui-zhong Su
  • Nie Hao
  • Jie Liu

Abstract

In the context of mixed-ownership reform being further deepened in Chinese state-owned enterprises, based on principal-agent theory and resource-based theory, the study uses Chinese A-share listed state-owned enterprises from 2008-2019 as the research sample, and analysed the impact of non-state shareholders board power on acquisition decisions, in addition to exploring the moderating role of board deep-level faultlines. It was found that empowering non-state shareholders board power increased the likelihood of state-owned enterprises making acquisition decisions; However, if there were deep-level faultlines in the board, the ability of non-state shareholders board power to motivate state-owned enterprises to make acquisition decisions was diminished. The findings of this study suggest that giving non-state shareholders board power may bring benefits to state-owned enterprises in terms of business investment, but with a focus on a reasonable allocation of board members.

Suggested Citation

  • Ning Wang & Hui-zhong Su & Nie Hao & Jie Liu, 2022. "Non-state Shareholders Board Power, Board Deep-level Faultlines and Acquisition Decisions by State-owned Enterprises in China," International Business Research, Canadian Center of Science and Education, vol. 15(7), pages 1-21, July.
    • Handle: RePEc:ibn:ibrjnl:v:15:y:2022:i:7:p:21
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    References listed on IDEAS

    as
    1. Sudip Datta & Mai Iskandar‐Datta & Kartik Raman, 2001. "Executive Compensation and Corporate Acquisition Decisions," Journal of Finance, American Finance Association, vol. 56(6), pages 2299-2336, December.
    2. Lee, Wen-Chieh & Wang, Shinn-Shyr, 2017. "Misallocations and policy constraints on mergers in the modern manufacturing sector," Journal of Macroeconomics, Elsevier, vol. 52(C), pages 268-286.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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