1 Introducti on
Research suggests that corporate governance differences may influence financial performance,
yet it is not completely clear how. Scholars examining performance differences between
State-owned enterprises (SOEs) and private firms have provided mixed results, but
on average, these studies suggest that privatizing SOEs results in improved financial performance
(e.g., Andrews and Dowling (1998); Martin and Parker (1997); Lioukas, Bourantas,
and Papadakis (1993); Lioukas and Kouremenos (1989)).