Minority Support Defeats Majority Opposition? Equity Balance and Strategic Attention in Chinese SOEs

Le résumé fourni par la source

Mixed-ownership reform is a significant research topic in Chinese state-owned enterprises (SOEs). However there is still a lack of theoretical understanding of how shareholders with conflicting value orientations affect strategic attention in SOEs after mixed-ownership reform. Drawing on attention-based view (ABV), we posit that both private and state-owned shareholders, as minor shareholders and major shareholders respectively, are the key players in SOEs that hold conflicting value orientations and jointly govern the allocation of SOEs’ strategic attention. We argue that as the equity balance of private shareholder on state-owned shareholders increases, SOEs’ strategic attention will increasingly align with the value orientation of private shareholders, even though they are still minority in SOEs. Moreover, two other important elements of the attention structure, the rules of the game and resources, shape the SOEs’ strategic attention together with players. The arguments are tested in the context of digitalization as it is a long-term and risk strategy which aligns more with private shareholders’ value orientation but not that of state-owned shareholders. We use data from all Chinese-listed manufacturing SOEs between 2009 and 2019 to test our argument and find emprical evidence. This study offers new insights into how equity balance of private shareholder on state-owned shareholders can influence SOEs’ strategic attention when these shareholders have conflicting value orientations. We further extend the ABV into the realm of SOEs and uncover the previously neglected impact of shareholders on firms’ digitalization.

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