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Friday, August 4, 2017

Prof. Meyer Wins JWB 2016 Best Paper Award

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August 4, 2017. Atlanta – A paper co-authored by CEIBS Professor of Strategy and International Business Klaus E. Meyer received the 2016 Best Paper Award from the Journal of World Business today during a reception the journal hosted at the Academy of Management Annual Meeting in Atlanta. The Journal of World Business was recognized as the No. 2 international business journal in the world in a recently released Google Scholar ranking.

Titled “Home Country Institutions and the Internationalization of State-owned Enterprises: A Cross-country Analysis”, it is one of the first research studies to explore how state ownership both facilitates and constrains corporate internationalisation strategies in different countries. The researchers looked at a unique sample of 153 listed state-owned enterprises (SOEs) from 40 different countries spanning both developed and developing economies with a wide variety of institutional and political configurations and compared them to a matched set of listed privately-owned firms (POEs). Their empirical results show that in countries with strong legal and governance systems, the internationalisation strategies of listed SOEs are more similar to those of listed POEs.

The strategic focus of SOEs differs from POEs because they must align with the strategy of their home country government to some degree. Their government ties mean SOEs also differ from POEs in terms of their governance, risk attitude, and access to resources. While the prime directive of POE senior managers is to maximize profits, their SOE counterparts have to balance the bottom line with a variety of different government objectives such as economic development, job creation, and dispensing occasional favours for constituents in politically influential groups. SOE senior managers therefore usually have less incentive to pursue international business opportunities. Staying focussed on their domestic market makes it easier to meet their objectives because their domestic advantages cannot be easily leveraged abroad.

The researchers found, however, that when appropriate executive incentives are provided and the legal and governance systems are stronger, listed SOEs will make similar internationalisation choices as their non-SOE counterparts. Strong formal governance institutions lead listed SOEs to act in ways similar to private firms, both by providing better monitoring of executives and by enhancing firms’ abilities to develop firm-specific advantages that may be leveraged in foreign markets.

Prof. Meyer is Philips Chair in Strategy and International Business and Co-Director of the CEIBS Centre for Globalization of Chinese Companies. His co-authors on this paper are Saul Estrin of London School of Economics, Bo B. Nielsen of University of Sydney, and Sabina Nielsen of Copenhagen Business School. Read the paper here.  

Writer: 
Janine Coughlin