The Dual Effects of State Ownership on Export Activities of Emerging Market Firms: An Inducement–Constraint Perspective

In this study, we integrate resource dependence theory and agency theory to argue that state ownership has a dual (inducement and constraint) effect on emerging market firms’ export performance. Building on this inducement-constraint framework, we hypothesize a non-linear relationship between state ownership and export performance of emerging market firms that is further moderated by the varying levels of home country government effectiveness. Using cross-sectional data of 4,239 firms from 16 emerging economies, as well as panel data of more than 10,000 Chinese exporting firms, we find supporting evidence for these hypotheses. The theoretical development and empirical findings of this study highlight the complex and dynamic relationship between state ownership, government effectiveness, and export performance among firms from emerging economies.