Home country institutions and the internationalization of state owned enterprises: A cross-country analysis

National institutions shape the ability of civil society and minority shareholders to monitor and influence decision-makers in listed state owned enterprises (SOEs), and thereby their strategies of internationalization. We argue that the weaker are such controls, the more likely such decision makers...

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Bibliographic Details
Published in:Journal of world business : JWB 2016-02, Vol.51 (2), p.294-307
Main Authors: Estrin, Saul, Meyer, Klaus E., Nielsen, Bo B., Nielsen, Sabina
Format: Article
Language:English
Subjects:
Decision making
Globalization
Home country institutions
Host countries
Host country
Internationalization
Matched sample
Private sector
Public enterprise
Public enterprises
State owned enterprises
Studies
Tobit regression
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Summary:National institutions shape the ability of civil society and minority shareholders to monitor and influence decision-makers in listed state owned enterprises (SOEs), and thereby their strategies of internationalization. We argue that the weaker are such controls, the more likely such decision makers pursue self-serving motives, and thus shy away from international investment. Listed SOEs’ strategies will thus be more similar to those of wholly privately owned enterprises (POEs) when these controls are more effective. Building on Williamson's (2000) hierarchy of institutions, we examine how home country institutions exerting normative, regulatory, and governance-related controls affect the comparative internationalization levels of listed SOEs and POEs. Based on a matched sample of 153 majority state owned and 153 wholly privately owned listed firms from 40 different countries, we confirm that, when home country institutions enable effective control, the internationalization strategies of listed SOEs and POEs converge.
ISSN:1090-9516
1878-5573
DOI:10.1016/j.jwb.2015.11.002