Book Review: Industrial Policy and Development: The Political Economy of Capabilities Accumulation, by Cimoli, M., Dosi, G. and Stiglitz, J.E., Oxford: Oxford University Press, 2009; pp. xix, 575.

- book review

The extreme outcomes of corporate tax management: Evidence from Chinese listed enterprises

This study presents an empirical analysis of how corporate tax management and government ownership influence a firm’s stock price crash risk. The study investigates firm-specific stock price crash to corporate tax management based on a sample of Chinese listed enterprises during 2008 to 2013 period and finds that tax management activities can lead to a significant decline in short-term crash risk. However, the results show that tax management would lead to the high probability of future crash risk, which is consistent with agency conflict between management and shareholders. Because of the opacity and complexity of tax management, there exists opportunities for short-term rent-seeking which can lead to future crashes. In addition, the study finds that the positive relationship between tax management and future crash risk is more pronounced in enterprises controlled by the municipal government

Shandong’s Yintan Town and China’s “Ghost City” Phenomenon

Although much research has been devoted to urbanization and city growth, urban dynamics also include city decay and renewal. Extant theories and models have been developed to explain these dynamics. They do not, however, fit the experience of China's "ghost cities". These cities have been characterized as state-built but minimally inhabited, testimony to planning failure by the monolithic Chinese state. The goal of the article is to provide in-depth insights to China's ghost city phenomenon and its effects to residents from local stakeholders' perspectives. A review of Shandong's new Yintan city reveals many ghost city attributes, but its development trajectory was at odds with this stereotype. Yintan's lack of success was attributable to too little, not too much, state intervention, reflecting limited state capacity to develop and manage the new city by Rushan, the nearby small city seeking to capitalize on the central government's development imperatives. These distinctive features notwithstanding, generic key drivers of city growth can help explain Yintan's lack of development, in a sense, reconciling the city's experience with extant research elsewhere. © 2019 by the authors

Determinants of Board Composition and Corporate Governance in Chinese Enterprises Since Reforms Began: A Comparison of Controlling Shareholders

This study focuses on the determinants of board size and board independence during an economic transition in China. It contributes to the body of Chinese corporate governance studies by applying the most comprehensive analytical framework to the periods before and after the split-share structure reform. Both static and dynamic estimation methods have been used. Overall, the study found that Chinese board size and independence are jointly determined by the scope of operation, cost and benefit of monitoring, CEO’s influence and other governance factors. Among these factors, the government was the most important player in constituting corporate boards before the split-share structure reform; after the reform, board independence became more important than other governance factors. In addition, when constituting corporate boards, private and market-oriented state enterprises are more concerned about cost than are government-controlled enterprises

Board independence, state ownership and stock return volatility during Chinese state enterprise reform

Purpose: This study aimed at investigating the influence of corporate governance on firm risk during the Chinese state enterprise reform. The purposes of this study are to examine the effects of board independence, state ownership and other governance variables on firm risk and to check the influence of controlling shareholder types on firm risk. Design/methodology/approach: This study uses the dynamic and static panel model to estimate the effects of board independence, state ownership and other governance factors on return volatility. To examine the influence of controlling shareholder types on corporate risk-taking, this study further used the treatment effect model (or sample selection model) to analyze the effect of private, state-owned enterprise (SOE) entity, central government and local government controls on corporate risk-taking. Findings: It was found that the enforcement of board independence significantly increases firm risk. The strategy of decentralizing state enterprises (from central government to local government) is a good way to achieve stable stock returns. Originality value: This study contributes to existing knowledge in several ways. First, it focused on independent directors rather than on the size of the corporate board. Second, it highlighted the impacts of state ownership and control on corporate risk. Instead of treating all types of state ownership as homogenous, SOEs are further classified into directly controlled and indirectly controlled, in line with prior studies

Financial Crisis, Stock Market and Economic Growth: Evidence from ASEAN-5

This paper examines the effects of the Asian Financial Crisis (AFC) and Global Financial Crisis (GFC) on economic growth in the ASEAN-5 countries. Indonesia, Malaysia and Thailand were found to be most affected by the AFC but not the GFC. Additionally, for Malaysia and Thailand, real output responded positively and significantly to shocks in the stock market. These findings are consistent with the results that show that the shock in the Kuala Lumpur Stock Exchange has a larger effect on real output than other variables for twenty periods. However, a shock in the Bangkok stock exchange has a higher effect on real output and the effect remained strong until the tenth period. This suggests that the stock market is an important economic growth driver in Malaysia and Thailand. © 2019 ISEAS - Yusof Ishak Institute

Introduction - The state's return to business: government-linked companies in the post-crisis global economy

The debate over how far governments should intervene in economies in order to promote economic growth, a debate which from the 1980s seemed settled in favour of the neo-liberal, non-interventionist consensus, has taken on new vigour since the financial crisis of 2008 and after. Some countries, most of them in industrialised Asia, have survived the crisis, and secured equitable economic growth, by adopting a developmental state model, whereby governments have intervened in their economies, often through explicit support for individual companies. This book explores debates about government intervention, assesses interventionist policies, including industrial and innovation policies, and examines in particular the key institutions which play a crucial role in implementing government policies and in building the bridge between the state and the private secto