The Liability of Opaqueness
——State Ownership and the Likelihood of Deal Completion in International
Department of Innovation and Strategy 2017-07-14
The Liability of Opaqueness: State Ownership and the Likelihood of Deal Completion in International Acquisitions
Speaker: JT Li Jiatao, Professor from Hong Kong University of Science and Technology
Host: Zeng Saixing, Professor and Director of Department of Innovation and Strategy, ACEM
Time: Jul 19, 2017, Wednesday, 10:00-11:30
Venue: S207 Xinshangyuan Building
State-owned enterprises (SOEs) are often less transparent and have more complex organizational structures than other types of firms. This opaqueness tends to generate political resistance when SOEs undertake cross-border acquisitions. Data on attempted foreign acquisitions by Chinese firms were analyzed to compare the likelihood of deal completion between SOEs and firms with other forms of ownership. The SOEs’ completion rate was 14% lower than that of other firms. Their disadvantage was shown to be less when they could provide credible signals by being publicly–listed (though only on an exchange in a well-developed economy and when they hired reputable auditors), having a better past record and hiring respected financial advisors. Overall, the evidence confirms that Chinese SOEs face greater resistance than other Chinese firms in international acquisitions, and their opaqueness aggravates the resistance.
Prof. Li is the Senior Associate Dean of the HKUST Business School, Lee Quo Wei Professor of Business, Head and Chair Professor of Management, Hong Kong University of Science and Technology. Prof. Li is an expert on global business strategy. His current research interests are in the areas of organizational learning, strategic alliances, corporate governance, innovation, and entrepreneurship, with a focus on issues related to global firms and those from emerging economies. His work has appeared in leading academic journals such as Academy of Management Journal, Academy of Management Review, Organization Science, Strategic Management Journal, Journal of Management, and Journal of International Business Studies. He has served as an Associate Editor of the Strategic Management Journal from 2009 to 2016. He is currently serving as Editor of the Journal of International Business Studies for 2016-2019, responsible for research related to strategy and policy in emerging economies. He is also on the editorial boards of the Academy of Management Journal, Global Strategy Journal, Journal of Management, and Long Range Planning. He was Program Chair of the Strategic Management Society’s special conference held in Hong Kong in December 2016. He will serve as Program Chair of the 2018 Academy of International Business annual conference in the US. He is an elected Fellow of the Academy of International Business (AIB).
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