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The value of partial state ownership in publicly listed private sector enterprises: evidence from China

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  • Zengji Song
  • Abraham Nahm
  • Zongyi Zhang

Abstract

This article highlights a certain dimension of political connection, namely partial state ownership in private sector enterprises (PSEs). Using a dataset of publically listed PSEs in China, we empirically investigate the effects of partial state ownership of PSEs upon firm performance. We demonstrate channels through which the benefits of partial state ownership are realised in terms of easier access to resources such as credit and industries to which entry is restricted by formal barriers, which ultimately increases the performance of firms. We also find some evidence that political participation of private sector entrepreneurs, another dimension of political connection, becomes less valuable when partial state ownership of PSEs is present.

Suggested Citation

  • Zengji Song & Abraham Nahm & Zongyi Zhang, 2015. "The value of partial state ownership in publicly listed private sector enterprises: evidence from China," Post-Communist Economies, Taylor & Francis Journals, vol. 27(3), pages 336-353, September.
    • Handle: RePEc:taf:pocoec:v:27:y:2015:i:3:p:336-353
    DOI: 10.1080/14631377.2015.1055967
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    1. Qi‐an Chen & Shuxiang Tang & Yuan Xu, 2022. "Do government subsidies and financing constraints play a dominant role in the effect of state ownership on corporate innovation? Evidence from China," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 3698-3714, December.
    2. Xin Li & Qiong Xu & Fei Guo & Hecheng Wang, 2023. "State‐owned equity participation and private sector enterprises' strategic risk taking: Evidence from China," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(2), pages 1107-1124, March.
    3. Baili Yang & Abraham Nahm & Zengji Song, 2022. "Succession, political resources, and innovation investments of family businesses: Evidence from China," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(2), pages 321-338, March.
    4. Bach Nguyen & Hoa Do & Chau Le, 2022. "How much state ownership do hybrid firms need for better performance?," Small Business Economics, Springer, vol. 59(3), pages 845-871, October.
    5. Tkachenko, Andrey & Yakovlev, Andrei & Kuznetsova, Aleksandra, 2017. "‘Sweet deals’: State-owned enterprises, corruption and repeated contracts in public procurement," Economic Systems, Elsevier, vol. 41(1), pages 52-67.

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