Abstract
State-owned enterprises (SOEs) contribute approximately 10% of the world’s GDP. SOEs at one time were predicted to disappear from the economic landscape of the world, but today SOEs are growing more prevalent in the world economy. The current theories of the firm that form the pillars of the management discipline largely ignore the theoretical differences that SOEs introduce into the conceptualization of the firm. Therefore, we extend four core theories of the firm by incorporating SOEs as a mainstream (not special or marginal) organizational form into these theories. We focus specifically on property rights theory, transaction cost theory, agency theory, and resource-based theory, culminating in a research agenda with 12 testable propositions.
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Notes
Another term for “state ownership” is “public ownership.” However, “public ownership” can be confused with “publicly listed but privately owned firms.” To minimize confusion, we use the term “state ownership.”
We are aware of the debates within the resources and capabilities literature on whether these two terms can be used interchangeably. Since joining these debates is outside the scope of our article, we have decided to use these two terms interchangeably. Also, we acknowledge there are debates on whether the resource-based view is merely a “view” but not a “theory” (Barney, 2001; Priem & Butler, 2001). We do not intend to join these debates and have followed Conner (1991) to label the resource-based view a “theory.”
Similarly, in India, partial (not full) privatization is found to enhance profitability and productivity (Gupta, 2005).
The official US government jargon for such SOEs is “government-sponsored enterprises (GSEs).”
In addition to the US government taking 61% of GM’s equity, the Canadian government took 8%.
The US Treasury Department now manages US government holdings in hundreds of SOEs. On the day when GM’s IPO went well in November 2010, the official in charge shared with BusinessWeek (2010: 35): “We have responsibility for almost $200 billion of assets and only one of those, which is very important, is GM. While it would have been nice to spend the day watching and feeling good about it, there was other business to attend to.”
In China, tobacco advertising is illegal on radio, television, and in newspapers, but there is little restriction on sales and sponsorship activities (BusinessWeek, 2011). Sponsoring rural schools and advertising on school gates is legal.
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Acknowledgments
Earlier versions of the paper were presented at the Research Conference on Central and Eastern Europe (Vienna, March 2012), Academy of Management (Orlando, August 2013), and Strategic Management Society Extension Conferences (Sydney, December 2014; Fort Worth, October 2015). We thank Jane Lu (Editor-in-Chief) and an anonymous reviewer for constructive feedback, and Dave Ahlstrom, Arnold Shuh, and Mike Young for helpful discussions. This research was supported in part by the Jindal Chair at UT Dallas.
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Peng, M.W., Bruton, G.D., Stan, C.V. et al. Theories of the (state-owned) firm. Asia Pac J Manag 33, 293–317 (2016). https://doi.org/10.1007/s10490-016-9462-3
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DOI: https://doi.org/10.1007/s10490-016-9462-3