Economic Growth, Government Partiality and Corporate Performance
Read
DownLoad |
| Title | Economic Growth, Government Partiality and Corporate Performance
|
| Author | Hou Qingchuan,Jin Qinglu and Chen Mingduan |
| Organization | Shanghai University of Finance and Economics |
| Email | acjql@mail.shufe.edu.cn；hou.qingchuan@mail.shufe.edu.cn；orville_20103@163.co |
| Key Words | Agency Problem of State, Agency Problem of Corporate, Economic Growth, Corporate Performance |
| Abstract | This paper examines the relationship between economic growth and corporate performance from the perspective of the twin agency problems – the agency problem of state and the agency problem of corporate. Based on that, it intends to clarify the micro foundation of China economic development by examining the path through which the macroeconomic environments affect the micro corporate performance. In regions with low marketization, where the extensive economic growth is attached with more importance, local governments have more discretion to allocate economic resources toward SOEs (State-owned Enterprises), and thus the agency problem of state exacerbates. In terms of growth, SOEs tend to focus on scale. Correspondingly, the empirical findings indicate that for SOEs, the relation between sales growth and GDP growth is stronger than that for Non-SOEs. In regions with high marketization, the agency problem of state alleviates, and the organizational infrastructures of Non-SOEs help to mitigate the agency problem of corporate, and thus the corporate puts more weight on intensive growth rather than extensive growth. That is, Non-SOEs tend to focus on earnings. Therefore, the relation between earnings growth and GDP growth is stronger for Non-SOEs than that for SOEs. |
| Serial Number | WP739 |
| Time | 2014-10-28 |
|