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Personnel Power: Governing State-Owned Enterprises

Published online by Cambridge University Press:  07 June 2021

Wendy Leutert Open the ORCID record for Wendy Leutert [Opens in a new window]  and
Samantha A. Vortherms Open the ORCID record for Samantha A. Vortherms [Opens in a new window]
Wendy Leutert
Affiliation:
Indiana University
Samantha A. Vortherms*
Affiliation:
Department of Political Science, 5229 Social Science Plaza B, University of California-Irvine, Irvine, CA92697-5100
*
*Corresponding author: Samantha A. Vortherms, email: [email protected]
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Abstract

State-owned enterprises (SOEs) retain a strong presence in many economies around the world. How do governments manage these firms given their dual economic and political nature? Many states use authority over executive appointments as a key means of governing SOEs. We analyze the nature of this “personnel power” by assessing patterns in SOE leaders’ political mobility in China, the country with the largest state-owned sector. Using logit and multinomial models on an original dataset of central SOE leaders’ attributes and company information from 2003 to 2017, we measure the effects of economic performance and political connectedness on leaders’ likelihood of staying in power. We find that leaders of well-performing firms and those with patronage ties to elites in charge of their evaluation are more likely to stay in office. These findings suggest that states can leverage personnel power in pursuit of economic and political stability when SOE management is highly politically integrated.

Keywords

state-owned enterprisesstate-business relationsChinapolitical mobility
Type
Research Article
Information
Business and Politics , Volume 23 , Issue 3 , September 2021 , pp. 419 - 437
Copyright
Copyright © The Author(s), 2021. Published by Cambridge University Press on behalf of V.K. Aggarwal.

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