Firm Ownership and Rent Sharing

In this paper we analyse—theoretically and empirically—how the degree of private versus public ownership of firms affects the degree of rent sharing between firms and their workers. Using a particularly rich linked employer-employee dataset from Portugal, covering a large number of corporate ownership changes across a wide spectrum of economic sectors over more than 20 years, we find that rent sharing is significantly higher in firms with a larger share of private ownership. Estimates from our most preferred empirical specification suggest that an increase in the private ownership share of 10 percentage points increases (on average) the rent-sharing elasticity by 0.0002. Based on a theoretical analysis that incorporates union-firm wage bargaining and efficiency wage effects within the same modelling framework, this result cannot be explained by private firms being more profit oriented than public ones. However, the result is consistent with a scenario whereby privatisation leads to less job security for workers, implying stronger efficiency wage effects.     

Exploring the roles of government involvement and institutional environments in the internationalization of Chinese Internet companies

The interactions between government, institutions, and Internet companies have gained attention in the research on the globalization of China’s Internet. However, few studies have been conducted at the company level, and the knowledge about the roles of government and institutions remains limited. Drawing on institutional theory, this empirical study explored the roles and mechanisms of government involvement and the institutional environment in the internationalization of Chinese Internet companies. The results indicated that government involvement could improve these companies’ degree of international breadth through both state ownership and governmental affiliation. However, the results showed that state ownership had a restraining function on their degree of international depth. In the context of institutional transition in China, these effects could vary according to whether Internet companies operate in good or poor institutional environments. By revealing these relationships, this study contributes to both the theoretical and the empirical understanding of governmental influence and institutional roots in the globalization of China’s Internet.     

Privatisation Effects: Some Evidence from Serbia

This paper analyses basic outcome and effects of the privatisation process in Serbia. The first two parts of the paper deal with general achievements of the newest privatisation plan adopted in 2001. We present a brief background of the results of the privatisation process, analysing changes in the structure of enterprises by ownership status, the number of privatised firms, revenues earned through privatisation, the rate of successful transactions, and other relevant privatisation indicators. The paper continues with an analysis of a survey conducted within a sample of Serbian enterprises offering some evidence about performance, competition, and restructuring within different types of firms: socially owned, privatised, and new private. Contrary to the broadly accepted statement that new private firms are leading in transition economies, according to our estimation of the effects of the ownership type on firm performance, it appears that the privatised sector seems to be more active. A comparison of the survey results with findings for three neighbouring countries indicates that there is no general conclusion about the way how ownership status of a firm affects its performance in a transition economy. Although conclusions drawn from our survey analysis should be regarded as preliminary and limited by the quality of survey data and could not be generalised for the privatisation process in other transition countries, the findings we present, including the comparison made with other economies, could contribute to the understanding of both privatisation effects in general and effects remarkable for the Serbian economy.      

Resource allocation and economic growth in China

This article shows that the allocation of resources among enterprises of different types of ownership is important to economic growth. The data on 30 Chinese provinces indicate that the investment share of state enterprises is negatively related to the growth rate of per-capita GDP, while the investment share of private enterprises is positively related to the growth rate. Meanwhile, the effect of total investment on the growth rate of per capita-GDP appears to be insignificant. The share of trade in GDP was positively related to economic growth. Also, the illiteracy rate of employees was negatively related to economic growth.     

Institutional holes and entrepreneurship in China

Theories of entrepreneurship and institutions have grown up in partial isolation, but they are actually complementary. By analogy with Ronald Burt's structural holes, the idea of institutional holes calls attention to the ways entrepreneurs create connections among sites kept separate by existing institutions. Especially in transitional economies, entrepreneurs strike a risky balance between acquiring institutional support for new enterprises without allowing institutions to absorb those enterprises, on one side, and creating profit‐making connections, on the other. The experience of a daring Chinese entrepreneur illustrates both the exploitation of institutional holes and the perils of institutional entrepreneurship.     

OUTSIDE OWNERSHIP AND WORKERS' EARNINGS AND TENURE

Increasing aggregate concentration in the economy has increased attention to the issues surrounding the outside ownership of enterprises. Outside ownership entails both industrial diversification and various forms of conglomerate ownership and represents an important new direction for studies of economic sociology and labor market segmentation. The article shows that the influence of four measures of outside ownership on worker's earnings and tenure is largely, though not universally, negative. Outside ownership tends to suppress earnings otherwise accruing to workers in companies with high levels of unionization, rapid growth, and high profits. Workers' tenure is influenced negatively by some types of outside ownership but positively by others. Tenure is reduced in subsidiary firms and in industries predominately owned by other industries due to reduced union influence on job tenure in these settings. Average tenure is increased in companies that are spread across several industries. These findings provide little support for dual labor market theories and other economic theories that argue that workers benefit from the market power of their employing organizations. Instead, the findings provide support for theories that stress the dangers to workers' fates arising from the increasing dominance of financial management in economic decision making.     

On large enterprises: new findings from a European comparison

The recent evolution of Italian capitalism shows the increasing relevance of large enterprises at three levels: the economic and institutional environment, the ownership structure, and the financing policy. A comparison of the financial structure of Italian large enterprises with those of other European countries (France, Germany, and Spain), using Bank for the Accounts of Companies Harmonised data, shows their financial fragility, where the prevalence of debt over equity justifies the still strong and close relationship between ownership control and management in their strategies and the prevalence of obsolete bank–firm relationships based on short-term external finance and multiple business lendings. These factors slow down firms’ expansion and consequently the need for companies to grow so as to face the new global market. Finance is confirmed as a determinant of growth both in size and in organisation. We conclude that a pivotal role for the growth of Italian firms lies in a “revised” relationship between size, governance, and the firms’ financial structure.     

Neoliberal resource governance and counter-hegemonic social movement in Bangladesh

Bangladesh’s energy sector institutionalized neoliberal policies in the early 1990s after a decade long implementation of structural adjustment policies suggested by the World Bank. These policies strengthened the role of foreign private capital and reduced the role of public enterprises. In spite of the country’s success in exploring and developing petroleum resources, the World Bank pushed for policy reforms to reduce the role of state-owned companies. Bangladesh signed several production sharing contracts with multinational energy corporations during 1993–1998. This resulted in the development of a counter-hegemonic social movement, the National Committee. Its activists made the energy sector the most contested national policy domain. Its direct action programs and other mobilization tactics transformed Bangladesh’s public sphere vis-à-vis energy politics. The National Committee caused the government to reverse its decision in some cases, but is far from achieving its main goal: increasing the capability of national institutions to maintain full ownership in natural resource management. Notwithstanding this limitation, the National Committee is a fascinating case of a counter-movement in the Global South contesting neoliberal resource appropriation.     

Kin Effects on Black-White Account and Home Ownership

This article combines the literature on kin networks and racial disparities in asset ownership. Specifically, we examine the effects of kin characteristics—sibling poverty and parental poverty, education, and occupation—on financial account ownership and home ownership. We find that kin matter for these outcomes. Having a poor sibling and coming from a poor family are negatively associated with account and home ownership while mother's education has a positive effect. Separate analyses by race suggest that kin characteristics matter for both Blacks and Whites for account ownership, but for home ownership they are significant for Whites only. Racial differences in kin characteristics account for over half of the racial gap in account ownership, but are not important for understanding the racial gap in home ownership. The significant effects of extended family characteristics on socioeconomic well-being make a case for the inclusion of kin variables in the growing literature on wealth disparities among Blacks and Whites.     

China's Way of Economic Transition

China started economic transition in 1978 to implement a Chinese type of socialist market economy system, i.e., a market-oriented economy consisting of collectively community-owned enterprises (CCOE) and state-owned enterprises (SOE) in a totalitarian political system with the Communist Party of China as the ruling power. The main contents of the economic transition can be briefly described as follows: (1) gradual decentralization of economic decision from central economic planning to market-oriented decision by delegating competence to managers of SOE and CCOE without privatization of public ownership, (2) liberalization of cross border economic activities (open-door policy), (3) allowance for Chinese to erect private enterprises (PE) on the one side and foreigners to set up foreign invested enterprises (FIE) on the other side, as well as (4) reorganization of SOE and CCOE. In comparison to the former Soviet Union and the Central and Eastern European countries, the following points of China's way of economic transition are of special interest. First, China's way of transition is a ``gradual trial and error' approach without a transition program set for long term but flexible and gradual way which is called a ``touch stones to cross river' approach. Field experiments have been carried out at first. A reform will be implemented after successful experiments. Second, the rural community becomes reorganized by breaking down communes, implementing a ``household responsibility system' in the agricultural sector and setting CCOE in the rural areas to carry out industrialization without movement out of rural labor (the slogan for this kind of transition is lee tuh puh lee shian [``move out from agriculture but not out of rural area']. Third, China's economic development is characterized by a huge expansion of CCOE in the eighties and newly founded PE consisting of FIE since the nineties, while only a very limited share of SOE has been privatized via the reorganization of the sector. China's way of economic transition has been a process of decentralization of the economic system from a central planning economy to one of decentralized market-oriented decision by delegating competence to management of SOE and CCOE without privatization of the ownership to increase efficiency. Fourth, China has been heavily loaded by a fragile banking system with a huge amount of nonperformance loan which implies a high risk of banking system crisis. Fifth, China's economic transition has been seen as a tool to keep the power of the Communist Party China with a periodically instable totalitarian political system and has permanently been confronted with risk of a political collapse. Human rights have not been protected in China. The FIE have crucially contributed to the growth of industrial production, export, and also the economic growth in China since 1979, especially since 1992. Economic special zones have significantly induced the rapid growth inflow of FDI which has financed the establishment of new enterprises instead of financing privatization of the SOE in China. Thus, it is not exaggerated to say that the FDI inflow has mainly contributed to the performance of the Chinese economic transition and the FIE have been the engine of the Chinese economic development.     

从第三方支付发展看上海国际金融中心建设

互联网时代第三方支付的发展,揭示了企业"控制用户信息流以控制支付流,控制支付流以控制资金流;获得用户网络接入权胜过获得资本所有权,获得数据投入量胜过获得资金投入量"的新规则。大平台日益成为金融机构控制用户信息流、获得用户网络接入权的重要载体,在平台组合上加载信用有关数据流日益成为形成金融机构风险管理能力的重要生产资料。在互联网时代推进上海国际金融中心建设,既要继续重视金融机构集聚,更要注重鼓励企业赢得全国性用户网络接入权,加强平台组合,增强信用数据流。上海应依托自贸试验区推进互联网金融监管创新;牵头建立长三角征信联盟集团公司;搭建本地金融机构网聚平台。     

Politics and Productivity

We use a stochastic frontier approach to study the effects of political and regulatory institutions on aggregate productivity in 39 countries from 1975 to 1990. We show that technical efficiency is positively related to policies supporting laissez-faire and political structures that promote policy stability. Moreover, models of technical efficiency incorporating both measures perform better than models including only one or the other. This suggests that economic performance depends not only on current policies but also on the confidence of market participants and outside investors that these policies will remain in place.     

The Political Economy of Institutional Landownership: Neorentier Society and the Financialization of Land

In recent decades a substantial shift in landownership has taken place in rural America as millions of acres of land have come under the ownership and control of various financial institutions. This article outlines a political economic framework for explaining and interpreting the significance of this proliferation of institutional investments into rural lands. Focusing on two of the nation's most important rural land resources—timberland and farmland—I suggest that we are witnessing an unprecedented integration between finance capital and landownership that harkens back to previous eras of rentier control. I further suggest that this increasing tendency to treat land as a financial asset—what I refer to as the “financialization of landownership”—gives rise to a number of contradictions that may have profound effects on rural communities across the United States. I conclude with a discussion of a land bubble and the role of institutional landowners in pushing up land prices in both timberland and farmland markets.     

Subprime Loans: A Reversal of Capital and a New Means of Inequality

This article provides a socio-historical analysis of particular financial instruments in the housing market. I argue that the production and consumption of subprime loans continue to evince a pattern of racial discrimination. Whereas racialized loans in the mid-1900s were based on providing credit to whites and precluding blacks from accessing credit (Wave I), a new means of financial production was predicated by the opposite (Wave II). Although the first wave of home ownership led to real increases in wealth, the second wave led to a housing bubble that resulted in less or negative wealth. Under the subprime era, banking institutions could reap profits when homeowners paid their loans on time or defaulted. White homeowners continued to fare better than black homeowners.     

HOW TRADING INSTITUTIONS AFFECT FINANCIAL MARKET PERFORMANCE: SOME LABORATORY EVIDENCE

The effects of trading institutions on market efficiency and trading volume are examined. The trading institutions are computerized versions of continuous double auction and "clearinghouse" markets. Traders are experienced, profit-motivated undergraduates. The traded good is a financial asset whose monetary value is state- and trader type-contingent. Traders possess asymmetric private information on asset value. The results show that clearinghouse markets are as informationally efficient as double auction markets and almost as allocationally efficient; the double auction encourages greater trading volume but the clearinghouse provides greater depth; public orderflow information enhances double auction performance but impairs clearinghouse performance.     

DIVIDEND POLICY IN REGULATED NETWORK INDUSTRIES: EVIDENCE FROM THE EU

We study the dividend policy of firms in regulated network industries, focusing on the impact of different regulatory regimes and government control. We link payout and smoothing decisions to different regulatory mechanisms (cost‐based vs. incentive regulation) and state versus private ownership. We test our predictions on a panel of listed European electric utilities, accounting for potential endogeneity of the choice of regulatory and ownership patterns. We find that incentive‐regulated firms smooth their dividends less than cost‐based regulated firms and that they report higher target payout ratios. Consistent with the interest group theory of regulation, we find that incentive regulation schemes are less likely when the state is still an important shareholder in the sector. Additionally, our results show that government control undermines the efficiency‐enhancing effects of incentive regulation on dividend policy, for example, lower smoothing is only due to private firms. (JEL G35, L51, L32, L9)     

New cooperatives and local development: A study of six cases in Jämtland,Sweden

Over the last ten years or so a large number of new cooperative enterprises have been established in Sweden in many different areas of activity. The research project reported here concerns the effects which these enterprises have on local economic development. More precisely, attention is focused on the impact of the cooperatives on (1) local employment, (2) the local infrastructure, and (3) the geographical pattern of buying, i.e., how the new cooperatives distribute their purchases of goods and services among local, regional and national suppliers. Six cooperatives are investigated, all of which are located in Jämtland, a county in northern Sweden. The cases include two commercially operating enterprises, two whose operations belong to the public sector, one housing cooperative and one community cooperative. Five of the studied units have created local employment, varying between 2 and 10 full-time jobs. This represents a substantial contribution in the small rural villages where the cooperatives are located. As regards the local infrastructure, the research interest is concentrated on the significance of the new enterprises in preserving the school, the shop and the communications of the village. Here the impact is effected in two ways; (1) by creating jobs and income, thereby strengthening the population base for the service institutions, and (2) by influencing municipal decision-makers. As for the pattern of buying, very small shares — between 0 and 17% — go to local suppliers. Instead, the effects appear at the regional level, with between 38 and 100% of the purchases being made from suppliers in the rest of the county.     

Effects of issue ownership and issue obtrusiveness on corporate reputation at two Korean corporations

This study attempts to identify the effects of issue ownership of a corporation on its reputation, and the moderating effect of issue obtrusiveness. Two representative Korean corporations (Hyundai and SK) were selected and their reputations were measured. It was shown that a corporation, which owns issues that were perceived as important by publics, has a higher corporate reputation. There was no moderating effect of issue obtrusiveness on the relationship between issue ownership and corporate reputation; however, there was a possibility of issue obtrusiveness as an independent variable. Implication for public relations research and practice was discussed.     

Paying for the Dream of Public Ownership: Case Studies on Corruption and Privatization in China

The proceeding of privatization is a tradeoff between short-term equality and long-term efficiency. Under the existing structures of enterprise management and government powers, enterprise managers are likely to conspire with government officials to decide the way of ownership transformation and share the benefits from there. The transformation of ownership will enhance the efficiency of the company. Corruption indeed presses ahead the transformation of company ownership, whereas inequality is also aggravated during the process. Case studies are provided to demonstrate the relationship between corruption and privatization in China. Corruption and inequality are what the country pays for their dream of public ownership in 1950s. Equality, efficiency and maintaining current social and political structure cannot be achieved simultaneously during enterprise restructuring.

Ownership patterns and centralization: A China and U.S. comparison

The paper examines the relationships between ownership and decision-making patterns in small business organizations in China and the United States. We also consider organizational size and the culture-free/culture-bound argument. The U.S. data (a sample of 540 enterprises) were collected by questionnaire in 1988; the Chinese data (a sample of 53 enterprises) by a converted and translated questionnaire based on the U.S. version and interviews in 1989. Findings indicate that the Chinese organizations with various forms of ownerships are more centralized than their U.S. counterparts, which is consistent with the culture-bound perspective. On the other side of the coin, findings suggest that in both China and United States, organizational centralization of decision making decreases with increasing size, although to different degree, which appears to support the culture-free argument.