by
Qiang Li, HKUST
Thursday, November 26, 2020 | 10:30am - 12:00pm | ZOOM, Room 321
Abstract
We examine how changes in the economic incentives of state-owned partners can reshape the balance of cooperation versus competition between partners in international joint ventures (IJVs). We identify a clear break in the economic incentive structure of state-owned enterprises (SOEs) by looking into the 2003 creation of the State-owned Asset Supervision and Administration Commission (SASAC). SASAC successfully strengthened incentives of SOEs to improve their financial performance. We analyze a sample of 651 Sino-Japan IJVs (1999–2006). For IJVs that had an SOE parent, we find evidence that the introduction of SASAC tilted the balance towards more competition. The Japanese or SOE partner who had the most bargaining power in the relationship, was more likely to be able to increase their ownership shares post SASAC.
