How does ownership influence business growth? A competitive dynamics perspective

Yang, W. and Meyer, K. E. (2018) How does ownership influence business growth? A competitive dynamics perspective. International Business Review, (doi:10.1016/j.ibusrev.2018.02.009) (Early Online Publication)

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Abstract

Firms engage in competitive actions to gain market share and hence to grow their revenues. However, not all firms are equally able to use competitive actions to drive growth. We argue that the ability to translate competitive actions to revenue growth depends on the ownership of the firm. Drawing on principal-agent and principal-principal perspectives, we argue that: (1) private owners (both foreign and local) are better able to employ aggressive actions to grow their business than state owners; (2) firms with multiple owners (especially international joint ventures) are less able to implement actions that drive business growth than full ownership. We find support for these arguments in empirical tests on survey-based data of 106 firms in China. Results show that in an emerging market the principal-principal perspective can better explain governance and competition than the principal-agent perspective.

Item Type:Articles
Additional Information:Financial support from the National Natural Science Foundation of China [grant number 71732004], [grant number 71672087] and [grant number 71272180], CEIBS Center for Emerging Market Studies, and Tianjin Social Sciences Foundation [grant number TJGL15-002] is gratefully acknowledged.
Status:Early Online Publication
Refereed:Yes
Glasgow Author(s) Enlighten ID:Yang, Dr Wei
Authors: Yang, W., and Meyer, K. E.
College/School:College of Social Sciences > Adam Smith Business School > Management
Journal Name:International Business Review
Publisher:Elsevier
ISSN:0969-5931
ISSN (Online):1873-6149
Published Online:01 March 2018
Copyright Holders:Copyright © 2018 Elsevier, Ltd.
First Published:First published in International Business Review 2018
Publisher Policy:Reproduced in accordance with the copyright policy of the publisher

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