Home / Lectures / Heather Haveman, University of California-Berkeley

Going (More) Public: Ownership Reform Among Chinese Firms

Heather Haveman, University of California-Berkeley

Description

Semester:

  • Fall 2009

Speakers:

Heather Haveman, Organizational Behavior and Industrial Relations Group, Haas School of Business, University of California-Berkeley

Lecture Time:

Fri, October 9, 2009 @ 1:30 pm to 3:00 pm

Lecture Location:

Room K1310, Ross School of Business

Speaker Webpage(s):

http://www.haas.berkeley.edu/faculty/haveman.html

Introduced By:

No introduction available.

Abstract

Going (More) Public: Ownership Reform Among Chinese Firms

In a fundamental and long-awaited reform, Chinese publicly-traded firms began to convert non-tradable shares, which constituted two-thirds of total shares outstanding and which were held largely by state bureaus, into shares that could trade on domestic exchanges. To facilitate this reform, tradable shareholders were compensated, usually with stock grants from non-tradable shareholders. State regulators impelled ownership reform but did not dictate the price of reform – the compensation paid to tradable shareholders. Compensation was negotiated between the two groups of owners. Non-tradable shareholders preferred to offer less compensation, tradable shareholders preferred to receive more compensation, and company executives, who brokered these deals, wanted the reform succeed at almost any price. When owners were better able to monitor company executives and other agents, compensation was set closer to owners’ preferences. Net of conflicts between shareholders and their agents, imitation of other firms strongly affected compensation. Our analysis contributes to research on China’s economic transition by modelling the outcome of this complex and critical multi-party negotiation. It also enriches institutional research on field-level change and isomorphism by concretely incorporating the power and interests of all parties – regulators, owners, and owners’ agents.

Recording & Additional Notes

Introducer: Maria Farkas, Sociology and Management & Organizations