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  • Research Article
  • Open Access

Leadership capability and the effectiveness of state-owned enterprise

Frontiers of Business Research in ChinaSelected Publications from Chinese Universities20082:13

Received: 20 November 2007

Published: 30 July 2008


In this paper, a conceptual model of state-owned enterprises(SOEs) is built up based on several different perspectives, such as property right approach, management approach, and leadership capability approach. Using the data of World Bank’s survey on 1500 Chinese firms from five cities in 2001, the authors conclude that differences in leadership capabilities represented by leaders’ demographic characteristics exert influences on enterprise efficiency. Specifically, the degree of such influences in the SOEs is much higher than that of in the non-state-owned enterprise(NSOE) due to reasons of property right problems and insufficient incentive mechanisms in SOEs. Furthermore, the authors argue that empowering reforms will lead to phenomenon of differentiation in SOEs, causing huge differences in enterprise performances in the long run.


  • leadership capability
  • firm effectiveness
  • empowering reform