دانلود رایگان مقاله انگلیسی رقابت در بازار محصول، مالکیت دولتی، حاکمیت شرکتی و عملکرد شرکت - امرالد 2017

1. INTRODUCTION

Debate on privatization or product market competition (PMC) in promoting firm efficiency has not reached conclusive results. A series of papers in public choice literature argue that increased competition in product markets plays a more important role than privatization in promoting allocative efficiency (Kay and Thompson 1986; Millward 1982; Wortzel and Wortzel 1989). Borcherding, Pommerehne, and Schneider (1982 p. 136) state that “given sufficient competition between public and private producers, the differences in unit costs turn out to be insignificant.” On the other hand, a number of studies find that government shareholders are more likely to expropriate firm wealth, thus advocating the privatization of public enterprises to enhance firm performance (Bailey 1986; Bishop and Kay 1989; Kikeri, Nellis, and Shirley 1994). However, some studies argue that good corporate governance practices in public enterprises may lead to no inferior efficiency relative to private enterprises (e.g. Sun, Tong, and Tong 2003). The objective of this study is to investigate the association between product market competition (PMC) and firm performance and how state-ownership and corporate governance practices affect firm performance when operating in markets with higher PMC.

6. CONCLUSION

This study investigates the influence of state-ownership and good corporate governance practices on the performance of Chinese listed firms operating in markets with higher PMC. We construct a corporate governance index which measures the extent of board independence, monitoring strength of supervisory board over board of directors, and monitoring strength of board of directors over CEOs. We consider different dimensions of the PMC that affect the nature of competition, and use market concentration, product substitutability and market size as the proxies for PMC.

Our study provides empirical evidence that Chinese listed firms achieve lower performance when they are confronted with higher PMC. We also find that state-ownership and/or good corporate governance practices can moderate the negative effect of higher PMC on firm performance. The findings suggest that in a transition economy where there is a strong presence of state-owned enterprises, state-ownership benefits firms when operating in markets with higher PMC. The study informs insiders of firms, investors and regulators that the moderation effect of state ownership on the association between higher PMC and lower performance is more pronounced for firms with good corporate governance practices relative to firms without good corporate governance practices. The findings suggest that good corporate governance practices restrain state-controlling shareholders’ expropriation behaviour (“grabbing hand”) and lead to the benefits brought by state-controlling shareholders (“helping hand”) to firms when operating in markets with higher PMC. The findings can be extended to other emerging countries that state ownership with good corporate governance practices can play an important role in the economy by mitigating the negative effect of higher PMC on firm performance.