http://repub.eur.nl/res/aut/4602/ List of Publications en http://repub.eur.nl/static-eur/img/logo.png http://repub.eur.nl http://repub.eur.nl/res/pub/37959/ 2012-11-28T00:00:00Z The Market Design (MD) approach to institutional analysis provides the analytical tools to evaluate endogenous institution building in local market places irrespective of the institutional setting of the national economy. Implicit in this analysis of endogenous institution building at the market place level is the recognition of institutional diversity, which none of the conventional forms of institutional analysis can provide. We extend the MD approach from its original game theory perspective to examine three market places in China: township and village enterprises, equity joint ventures and public utilities. We conclude that the MD approach (1) provides the analytical tools and criteria to evaluate whether or not market places are robust and sustainable, (2) links market behavior at the market place level, which is characterized by size, coordination and trust problems, with general level considerations based on transaction costs, and (3) suggests that functioning market places are achievable, even if the formal institutions of the general economy are weak or partially missing. Our research has policy implications and opens new avenues for research into the emergence of markets. http://repub.eur.nl/res/pub/23640/ 2012-09-01T00:00:00Z The market design (MD) approach to institutional analysis provides the analytical tools to evaluate endogenous institution building in local market places irrespective of the institutional setting of the national economy. Implicit in this analysis of endogenous institution building at the market place level is the recognition of institutional diversity, which none of the conventional forms of institutional analysis can provide. We extend the MD approach from its original game theory perspective to examine three market places in China: township and village enterprises, equity joint ventures, and public utilities. We conclude that the MD approach (1) provides the analytical tools and criteria to evaluate whether or not market places are robust and sustainable, (2) links market behavior at the market place level, which is characterized by size, coordination, and trust problems, with general level considerations based on transaction costs, and (3) suggests that functioning market places are achievable, even if the formal institutions of the general economy are weak or partially missing. Our research has policy implications and opens new avenues for research into the emergence of markets. http://repub.eur.nl/res/pub/38118/ 2012-01-01T00:00:00Z The business ethics which we find in firms, implemented by managers and facilitated by formal economic institutions is socially embedded in the general perception of what economic development stands for. A country where monetary rewards get allocated to those who produce increasing market shares of their firms, and where social reputation is linked to conspicuous consumption as for example the US (or China?) follows another development path than, let's say the Netherland in the 16th century where prudency in management, modesty in consumption and long-term wealth accumulation led to the "Embarrassment of Riches" (Schama, 1987). This paper is to examine the concept of development and happiness for a better social and economic progress. http://repub.eur.nl/res/pub/40077/ 2011-05-01T00:00:00Z The speed by which China has moved towards a market economy has not been accompanied by a similar development of its judiciary system. Since the early 1990s, foundational national legislation with a direct effect on firms, such as laws dealing with contract, investment, liability and insolvency have been introduced, sometimes reluctantly. http://repub.eur.nl/res/pub/38809/ 2010-01-01T00:00:00Z Abstract: Li Ning Co. Ltd. (Li Ning), a Chinese sport apparel, footwear, and equipment company founded in 1989 by the Olympic gymnastics gold medallist, grew from a family business into China’s number one sporting goods brand in less than two decades. Its products, generally considered price-quality bargains, were distributed throughout China. The company’s ambition was not confined to the home market, however. It went public in 2004 on the Hong Kong Stock Exchange, where it raised $US 70.5 million to establish itself as an international brand, competing with brands like Adidas, Nike, and Reebok. It stepped up international marketing and exports, set up R&D centers overseas, distributed European brands in China, and sponsored international sporting events. In 2007, Li Ning made its first attempt to directly access foreign markets by opening a flagship store in Maastricht, the Netherlands. When it speeded up internationalization by opening stores in Southeast Asia, Hong Kong and the US from 2009 to 2010, its business at home faced major challenges as competition from both international and local rivals intensified. Committing resources to internationalization, therefore, became harder to justify. Li Ning had to decide whether to further expand internationally and, if so, whether to remain a price fighter or develop a more differentiated strategy. http://repub.eur.nl/res/pub/38862/ 2010-01-01T00:00:00Z Abstract: China’s leading beverage company, Hangzhou Wahaha Group (Wahaha), and the French beverage giant, Groupe Danone (Danone), formed a strategic Joint Venture (JV) partnership in 1996. Within the next decade, Wahaha became China’s biggest beverage producer and the 5th largest worldwide, with annual sales of RMB 11.1 billion (US$1.4 billion). By 2006, 5%-6% of Danone’s global profits came from the JV and Wahaha was among its top 4 brands. Despite all this success, Danone and Wahaha became trapped in a complex and thorny relationship. A series of legal battles, accompanied by high-profile media wars, broke out in April 2007. The initial trademark transfer dispute escalated into fights about foreign monopoly, local protectionism and national economic security, which led to the presidents of both countries asking each party to find an amicable solution. Danone’s first half-year result for 2007 shows that its sales from the JV dropped by 6% compared to the same period in 2006, and its stocks plunged by 9% just over two months after its confrontation with Wahaha became public. How could a promising relationship turn bitter, and why? Given that for many multinationals China is an indispensable market, what lessons can they draw from the Danone-Wahaha dispute? http://repub.eur.nl/res/pub/38670/ 2010-01-01T00:00:00Z Abstract: Founded in 1999, the Alibaba Group had become China’s leading e-commerce company by 2008. It owns and operates Alibaba.com (the world’s largest business-to-business e-commerce platform) and Taobao.com (China’s number one consumer-to-consumer e-commerce platform). Alibaba.com Limited raised US$1.7 billion at its initial public offering (IPO) on the Hong Kong Stock Exchange in November 2007, making it the world’s second biggest Internet offering after Google’s 2004 IPO on the NASDAQ. Taobao.com also attracted significant international attention because it managed to displace the once dominant eBay (the world’s largest consumer marketplace) in China by 2007. The Alibaba Group attributes its success largely to the business network it has fostered. It founded several sister companies alongside Alibaba.com and Taobao.com to cross-sell and cross-market one another’s services and offer packaged deals. In this way, it formed a network of suppliers, partners and customers to fully exploit and serve their market. The Alibaba Group’s vision is to build a business network that will make it possible to do all aspects of business online. Considering the growing e-commerce industry worldwide, three questions are pivotal: 1) How should the Alibaba Group anchor its long-term strategy – further expand the business network by including players from many more industries or specialise in several strong industries within the business network? 2) Would another business model emerge to challenge the Alibaba’s business network? 3) How would the Alibaba Group face competition within China and abroad – continue to focus on the Chinese market or grow outside the home base and build a global business network? http://repub.eur.nl/res/pub/14842/ 2009-02-18T00:00:00Z The purpose of the paper is to assess the current state of network research in China’s business system. Research on networks has developed significantly during the last decades in regards to analytic techniques, number of research projects, and accumulated findings. While research on networks in China has always received much attention – not least because networks are (still) considered one of the major forces behind the country’s socio-economic change – this development has also had an effect on how research on generic networks in China is being conducted. How Chinese networks are modelled, which aspects remain controversial in the academic debate, and which conclusions the different studies offer asks for a systematic comparison. The paper, based on an extensive literature research, therefore relies on a framework of theoretical concepts underlying the study of networks which allows a categorization of the dominant (generic) forms of Chinese networks as discussed in major journals. The study on the one hand is descriptive by filtering the diverse literature of network research on China’s business system. On the other hand, it serves to identify gaps and shortcomings of the current literature in this field pointing to future research directions. We identify four generic types of networks, Chinese business groups (qiyejituan), Overseas Chinese Communities, networks of social relations (guanxi), and Network Capitalism, as an alternative economic model. As the study shows, the research approaches to these networks are extremely diverse both in description and analysis. A focus on the identified gaps within each type of network and a convergence between the types of networks should yield to further insights into the study of networks as well as their implications for economic systems. http://repub.eur.nl/res/pub/13764/ 2008-10-29T00:00:00Z Legal Origin Theory is applied to Reform China’s legal system in order to create a development model for a national legal system influenced by multiple legal families. Utilizing an extensive literature review and assessment of national laws affecting property rights, the model depicts how a legal system develops on the national level under multiple normative influences. Further research will elaborate on the interactions between the normative influences within the legal system. http://repub.eur.nl/res/pub/12191/ 2008-04-17T00:00:00Z We start our exploration of China’s institutional change by asking what the China experience can tell us about institutional economics and organization theory. We point to under-researched areas such as the formation of firms and the interplay between firms and local politics. Our findings support the dynamic capability approach which concentrates on activities rather than on pre-defined groups and models institution building as a co-operative game between the local business community and local government agencies. We find that the analysis of firms has to set in before they are formed by entrepreneurs and networks and we identify political management as a core competence of these two groups. While this contradicts the conventional view of clientelism or principle agent relations as institutional building blocks, we don’t propose competing models. Instead, we suggest focusing on a dynamic process in which the role of players can change. Faced with the spontaneous emergence of institutions, our concept of institutional architecture captures the fact that the two models can co-exist side by side and that, once the dichotomy between formal and informal institutions is given up, there can be a transition from local patron-client relations to local business-state coordination. http://repub.eur.nl/res/pub/11287/ 2008-02-05T00:00:00Z How is "public finance" organized in China? Is China’s public finance system different from that of other countries? Can we detect features which link today’s system to the past? Public finance refers to more than annual state budgets and constitutional procedures. It includes foreign debt, state monopolies or monetary policies, all of which played a crucial role in China’s public finance during the last hundred years. A purely legislative definition obscures the fact that changes in public finance have contributed to the collapse of political regimes such as Imperial China (1911), Republican China (1927), and KMT-China (1945), as well engendered regime changes in 1949, 1961 and 1978. From a more comprehensive economic perspective public finance in China encompasses institutions, organizations and policies. http://repub.eur.nl/res/pub/7853/ 2006-06-30T00:00:00Z The paper claims that the analysis of the private business sector needs to concentrate on entrepreneurship. Based on fieldwork the paper proceeds by describing how Chinese entrepreneurs perceive the (economic) problems whose solutions pre-determine the economic performance of new firms. Entrepreneurship takes the form of institution building by which the high transaction costs can be mitigated and the value of assets and contracts be protected. The empirical research identified corporate governance, incentive contracts, local autonomy and networking as the crucial “hybrids” for mobilising investment and limiting moral hazard. http://repub.eur.nl/res/pub/7854/ 2006-06-30T00:00:00Z The paper offers a frame for investigating the extent to which decentralisation, and subsequent locally chosen institutions shape private organisational and institutional innovation. To include the numerous locally based “economic regimes” matters as the resulting business system reflects political institution setting and private organisational innovation. Such a frame is a necessary first step for empirical studies attempting to explain the heterogeneity of China’s business systems, the emergence of hybrid organisations, and last but none the least, the different growth rates that can be observed across China. http://repub.eur.nl/res/pub/7577/ 2006-03-10T00:00:00Z Bearing the legacy from central-planned system, the tax system in local China still lacks transparency and, in many cases, the liabilities of firms, especially those with extensive influences, are subject to negotiation despite the new tax-reform 1994. Applying Hirschman’s Exit-Voice theory, we construct a game model of interplay between firm and local government, in terms of exit and voice for preferential tax treatments, thereby revealing dynamics of these two options under rational entrepreneurship of economizing transaction cost. Suggested by the model, exit not only induces firm to opt for voice, it also underpins firm’s voice that forces local government to compromise. Particularly, when holding private information of exit cost, firm is able to mimic behaviors of those with high mobility so as to boost the effectiveness of voice. The empirical cases fully illustrate such rational entrepreneurship of exit plus voice to profit from local preferential policy. http://repub.eur.nl/res/pub/7331/ 2006-02-06T00:00:00Z We advance a conceptual frame for explaining economic transformation in China that combines a dynamic and a comparative perspective by taking the analysis of Fiscal Federalism one step further. Using insights from the comparative business systems literature we show that devolution of power at the beginning of the reform process introduced local autonomy, which stimulated a diversity of local regulatory regimes. As the central political leadership is no longer the sole supplier of institutional change, local governments become equal contributors to the formation of local business systems. Yet, local governments only partially define emerging local business systems. Local governance at the enterprise level is defined by the interaction between political and economic entrepreneurship, or, phrased in institutional terms, local business systems emerge from the interplay between the formal architecture of local autonomy and the informal institution of networking. In a comparative perspective this interaction, and its underlying driving forces for co-operation, namely: procedural uncertainty, relational risk and institutional change, will lead to diversity in outcomes. In a dynamic perspective both market competition and networking will ensure further competition between business systems, while political unification, imitation or scale economies will ask for convergence of local business systems beyond the local nexus. http://repub.eur.nl/res/pub/7188/ 2005-12-21T00:00:00Z China like other transition economies needs to establish a tax system compatible with a market economy, in particular, an efficient tax administration system with capable tax bureaucrats. The paper singles out the general and China-specific features by which central government attempts to accompany economic transformation via tax farming to tax bureaucratisation in tax administration. Based on empirical study in two provinces this paper shows that without including local government agencies and their budgets, China’s fiscal federalism cannot be analysed and argues that China’s emerging tax system depends on the institutional and organizational design that shapes the interaction between central government, local governments and economic agents. http://repub.eur.nl/res/pub/7175/ 2005-12-19T00:00:00Z (Last revised version December 2005) To address the problem why China, as a communist country, moves in the opposite direction when the public sector has undergoing a continuous growth in most Western economies since the World War II, we offer a new approach that the de facto fiscal decentralization curtails government size in transition China in addition to conventional explanations. Meanwhile, by analyzing panel data and various variables used by previous empirical studies, this paper tests the Leviathan hypothesis for vertical decentralization, horizontal fragmentation and intergovernmental collusion at central-provincial and provincial-local level. Our empirical results not only explain Chinese shrinking government size, but also lend support to Leviathan hypothesis, especially, under the condition of the absence of traditional democratic electoral constraint. http://repub.eur.nl/res/pub/6551/ 2005-05-10T00:00:00Z To address the problem why China, as a communist country, moves in the opposite direction when the public sector has undergoing a continuous growth in most Western economies since the World War I, we offer a new approach that the de facto fiscal decentralization curtails government size in transition China according to Leviathan theory. Meanwhile, by combining time series and cross-section regression analysis and various variables used by previous empirical studies, this paper tests the Leviathan hypothesis for vertical decentralization, horizontal fragmentation and intergovernmental collusion at national and provincial level, respectively, based on the new data set of China. Our empirical results not only explain Chinese shrinking government size, but also lend support to Leviathan hypothesis, especially, under the condition of absence of traditional democratic electoral constraint. http://repub.eur.nl/res/pub/1821/ 2004-12-10T00:00:00Z This paper offers a new data set and window to empirically test Leviathan theory in the sense of China's transition economy. By combining time series and cross-section regression analysis and various variables used by previous empirical studies, we test the Leviathan hypothesis for vertical decentralization, horizontal fragmentation and intergovernmental collusion at national and provincial level, respectively. Our empirical results lend support to Leviathan hypothesis, especially, under the condition of absence of traditional democratic electoral constraint. http://repub.eur.nl/res/pub/1787/ 2004-10-29T00:00:00Z This article firstly present a systematic overview on national tax regime by classifying China’s tax regime into three broad phases in context of underpinning market-oriented institutional development during last two decades and, then, in supplement to previous literatures that largely stop at provincial level, unveil the complex and obscure local tax regime based on sub-provincial field research in Zhejiang and Jiangsu province. The authors observed dual existing tax regimes: the hard and standardized state tax regime under central custody versus de facto soft and flexible local tax regime under local promotion and argue that despite central persisting initiatives in unifying tax regime and recentralization, local variation and divergence continue to play indispensable role in implementation of central reform due to China’s sheer size, geographical, cultural and resource endowment disparity as well as local state’s self-interest seeking inevitably induces localized adaptation of central policy and, consequently, calls for further decentralization. http://repub.eur.nl/res/pub/1128/ 2004-01-21T00:00:00Z Entrepreneurial activities in transition economies go beyond (technical) entrepreneurship. In an environment of institutional and procedural uncertainty entrepreneurs need to select business partners, choose a mode of governance that stabilizes long term business relations, and settle for such property rights regime that best matches the entrepreneurial endeavour. Bases on fieldwork in China the paper shows how entrepreneurs combine their predisposition for social relations with economic reasoning when they embed firms in one location, in mixed forms of relational and contractual governance, and specific ownership structures. The empirical research points to alternative economic concepts which allow further analysing the interaction between individual entrepreneurship and the emergence of market conforming institutions. http://repub.eur.nl/res/pub/1841/ 2004-01-01T00:00:00Z China like other transition economies needs to establish a tax regime compatible with a market economy. The paper singles out the general and China-specific features by which national legislation attempts to accompany economic transformation. Based on an empirical study in two provinces this paper shows that without including local government agencies and their budgets, China’s fiscal federalism cannot be analysed. This paper argues that China’s emerging tax regime depends on the institutional design that shapes the interaction between firms (as major tax payers at the local level), local government agencies, and the national tax administration. http://repub.eur.nl/res/pub/1842/ 2004-01-01T00:00:00Z This paper attempts to explain how institutions in the reform era of China have evolved by looking into the FDI policies and regulations. As history matters, we don’t look solely into the previous direct stage to the reform era, and rather look into a longer history starting from prior to the 14th century. The study shows that a dimension of time is crucial to understand institutional change in China. Though the initiation of the open-door policy in the reform era is commonly regarded as path-break event, we claim that this institutional change is a path dependent event from a longer historical view. The path takes a zigzag that is shaped by interaction among interested parties: the central government, local governments and economic agents (foreign investors in terms of the open-door policies). The historical study shows that mutual needs and their behaviours influence their attitudes which further influence institutional building. This also further implies how Chinese institutions may evolve in the future and what we should concern more about institutional changes in transitional economies. http://repub.eur.nl/res/pub/993/ 2003-10-28T00:00:00Z Terrorism is not a natural hazard outside the range of corporate decision-making. Simple micro-economic analysis shows how globalisation changed the supply of terrorist attacks and the costs for tolerating terrorist hazard. Approaches developed in organizational strategy help to single out three strategic decisions directly affecting the vulnerability of firms in a globalised world: exposure, geographical spread, and organisational form. The analysis suggests that the gains from ubiquity, leanness in production, and long-term commitment need to be adjusted for the terrorist hazard involved. http://repub.eur.nl/res/pub/1127/ 2003-01-01T00:00:00Z Depending on the kind of literature networks in general, and Chinese networks in particular seem to be different phenomena, or are explained by different factors leaving the interested public puzzled. Whether Chinese networks resemble Clans, Clubs, or Mafia-kind of organizations is as much disputed as the effects of networking on the economy. While some argue that networks contribute to overall factor productivity in a situation in which neither the old planning system nor the nascent markets function, others insist on their counterproductive potential for the transformation of the Chinese economy. A third group dismisses networks as a transitory phenomena that will disappear with ongoing market reforms, in particular the wider use of the price mechanism for allocating resources and co-ordinating economic activities. The following attempts to shed some light into the confusing argumentation by grouping the different approaches according to what is explained, and the explaining items. The paper will systematically compare theories that are usually classified as taking a cultural, economic, and evolutionary perspective and which can be found in China-specific or social science literature. All these approaches claim to provide explanations for (Chinese) networks. Yet they differ with respect to the phenomena that they want to explain, namely networks and/or the explanatory factors they regard as crucial. Thus, for example cultural and economic, better: Transaction cost economics (TCE) approaches focus on networks as a given organizational form, while evolutionary economics or the capability approach in management science include a further dimension, namely time, subsequently regarding network as an activity that might lead to different network forms. The approaches differ also widely according to the factors singled out – or isolated -which are claimed to be the crucial items in any explanation for networks. As will be shown the two competing models in which networks are either based on co-ethnic groups or on expected functional value are not necessarily mutually exclusive. http://repub.eur.nl/res/pub/160/ 2002-01-29T00:00:00Z The literature on transaction costs concentrates on established firms in established markets, while the literature on industrial ecology concentrates on new firms in given markets. It is contested in the following that the picture looks differently if the analysis concentrates on establishing new firms in new markets, such as e-commerce or the new private sector in the formerly socialist economies. A new market is defined by high uncertainty. First, the general knowledge of expertise in a society is low, so that young entrepreneurs find it hard, and costly, to acquire the necessary know-how. Second, institutions, might these be the law, business practices, or intermediaries, are poor and underdeveloped. It will be argued that in China therefore entrepreneurship depends crucially on the ability to establish firms, i.e. to find organisational forms for business ventures that facilitate long-term business relations within and around a firm, that is to say, individual entrepreneurship depends on mechanisms for co-ordinating individual or organisational behaviour of firms. These mechanisms were lacking under socialist planning. The legacy of the planned economy was an environment of weak economic institutions in which state-socialist institutions uneasily coexisted with market institutions, and newness of private exchange added to uncertainty. In this environment, economic actors depended on collective action to create their own institutions, driven by the need to agree on rules of conduct in business relations and on sanctions against violation of these rules. The study will concentrate on two essential components of (private) entrepreneurship. One is the search for organisational forms conforming to the situational constraints; the other is the formation of business practices that enable individual entrepreneurship to become a viable and sustainable course of action. In other words, we will attempt to show how the transaction cost advantage of organisational forms and co-ordination mechanisms can compensate entrepreneurs for the disadvantage they face with respect to the lack of clearly defined property rights. Based on extensive fieldwork in two provinces where 100 firms were interviewed the study can show that 1. as predicted by approaches in industrial ecology both experimentation and selection were crucial in shaping the new private business sector; 2. on the individual level the performance-orientation of Chinese culture allowed entrepreneurs to combine rational decision making with tradition. Both factors can explain why for example the family in China but not in Chinese overseas communities is no longer the natural base for private firms, why networks are assessed by their expected performance, or why Chinese firm do not care about building up a core business. 1 http://repub.eur.nl/res/pub/71/ 2001-02-09T00:00:00Z This paper is part of a broader research project that aims to analyse the emerging private business sector in China by focusing on three topics. http://repub.eur.nl/res/pub/152/ 2001-01-22T00:00:00Z Moral outrage was the response of the Chinese press, when Cheng Kejie, one of the country's highest officials, Vice-Chairman of the Standing Committee of the National People's Congress (NPC) and former Governor of the Guangxi Zhuang Autonomous Region, was arrested on grounds of corruption on 25 April 2000. Cheng's arrest came amidst a spate of serious corruption cases that reached into the top echelons of China's state leadership (China Aktuell 2000). His case attracted wide public attention in national and international Chinese media because of his high office, the number of officials implicated, and the involvement of his lover Li Ping (dubbed the 'Jiang Qing of Guangxi' by the Hong Kong and overseas Chinese press) (Ming Pao 2000), daughter-in-law of his predecessor in the position of Governor of Guangxi, and for years the most influential woman in Guangxi. This was not just a case of a local official embezzling public funds, but a story of love and greed of a popular political leader, who had achieved much for his province. This was also not the story of an anonymous mistress, but of an ambitious, intelligent and attractive woman using the position of first her father-in-law then her lover to systematically and on a long-term basis exploit the powers vested in the office of provincial governor. The accusation against them focused on three crimes: appropriation and sale of real estate development and construction rights, sale of publicly subsidized goods at market prices and promotion of trusted allies into official positions of power. While the personal details of his deeds and his final execution in September 2000 fascinated the Chinese and Hong Kong press, his case also demonstrates how corruption works in China today (Hendrischke 2001). http://repub.eur.nl/res/pub/150/ 2001-01-21T00:00:00Z It seldom happens that new firms, new industries, and new business systems need to be developed simultaneously. This, however, is the situation in transition economies such as China. Irrespective of product and technology used, incentives and governance structures need to be formulated that give business endeavours an organisational form. The survivability of firms depends further on the ability to start and maintain long-term business relations between contracting parties, while only a broad consensus within the community of entrepreneurs and firms on the procedures that co-ordinate business relations and sanctions transgression promises a decline in transaction costs sufficiently enough to trigger off the quick expansion of markets. http://repub.eur.nl/res/pub/151/ 2001-01-21T00:00:00Z Recent years have seen the introduction of markets and a system of private property rights in China with a view to changing the composition of production and demand and enhancing welfare. Central to the success of these reforms is the rise of entrepreneurship with its potential to set the economy on a higher growth path by supplying the products which consumers need and want, creating new employment opportunities, and introducing new and more efficient technologies of production. But to what extent can we expect to see entrepreneurs in China behaving like their counterparts in the advanced industrial economies of Western Europe, Japan, and the United States? This is the question we address in this chapter. In our view, the reform programme has, indeed, opened up new opportunities for private enterprise activity; but idiosyncrasies of the business environment are at the same time generating novel institutional arrangements in support of entrepreneurs' investments. We agree, therefore, with Herrick and Kindleberger when they assert that "Development ought not to be viewed as a monotonic, stylized path, ever onward and upward, historically established and invariably repeated" (1983, p.62). http://repub.eur.nl/res/pub/142/ 2001-01-09T00:00:00Z The development of entrepreneurship and a private business sector in China pose various challenges to analysis. On the one hand, neo-classically based New Institutional Economics aims to find evidence that long-term investment and long-term commitment in and around firms can not be expected without deeply entrenched and state guaranteed private property rights. On the other hand, empirical studies within the China field concentrate on the political processes, in particular the interaction between the central state and local governments, at the danger of neglecting market forces, economic interests, and economic problems at stake. The empirical study on which the following is based took a different path by using a set of framing assumptions. http://repub.eur.nl/res/pub/143/ 2001-01-09T00:00:00Z Die ?konomie ist so kultur- wie geschichtslos. Das ist ihre St?rke, vermag sie doch deshalb Gemeinsamkeiten auch dort zu entdecken, wo Historiker, Anthropologen, und nicht zuletzt die Bewohner eines Landes, Einzigartigkeit beanspruchen. Es ist auch ihre Schw?che, weil nur das sein kann, was gem?ss des analytischen Instrumentariums, sein darf. Eine positive wirtschaftliche Entwicklung muss durch funktionierende M?rkte hervorgerufen worden sein. Eine Zunahme der Faktorproduktivit?t deutet auf das Funktionieren des Preismechanismus hin, wenn nicht gar Korruption als Pareto-superiore L?sung und subversiver Weg mit administrativen Vorschriften umzugehen, gewertet wird. China gibt deshalb konzeptuelle wie empirische Probleme auf. Das sind auf der einen Seite die hohen Wachstumsraten der Wirtschaft, die durch einen verbesserten Ressourceneinsatz, aber auch die Mobilisierung zus?tzlicher Ressourcen hervorgerufen wurde. Da ist aber auch die Transformation eines Wirtschaftssystems weg von einer Planwirtschaft hin zu einer arbeitsteiligen Konkurrenzwirtschaft, die im Vergleich zu den ehemals sozialistischen Staaten in Mittel- und Osteuropa von geringerer Arbeitslosigkeit, geringeren Inflationsraten und hohen Exporterfolgen begleitet wurde. Das herk?mmliche Instrumentarium der ?konomie kann hier nur wenig befriedigende Erkl?rungen bieten. Deshalb scheint die Literatur, die in der Kultur die Ursache f?r den chinesischen Wirtschaftserfolg sieht, vielversprechender zu sein. Diese Interpretation kann zus?tzlich als Beleg anf?hren, dass mit Korea, Taiwan, Hongkong und Singapur weitere chinesische Staaten mit ebenso beeindruckenden Wirtschaftsleistungen aufwarten k?nnen. http://repub.eur.nl/res/pub/283/ 2000-12-01T00:00:00Z The paper describes the emergence of entrepreneurship in Shanxi province based on fieldwork in the last 6 years. Employing institutional and evolutionary economics shows that both the kind of firms that emerge and the individual behaviour of entrepreneurs reflect a systematic response to the situational constraint all would-be entrepreneurs face, namely a high level of uncertainty and weak institutions. In this situation to establish firms with a weak organisational identity allows to flexibly respond to new opportunities, while a strong reputation for accountability of the owners and managers is needed to get long term business relations started. As the Shanxi sample shows accountability can be achieved by a mix of reviving old economic institutions, hijacking social organisations, and building new business practices. To the extent that old institutions, social organisations and business practices do not spread equally across China, different forms of firms and different forms of entrepreneurship can be expected within China. In short, local cultures matter. http://repub.eur.nl/res/pub/59/ 2000-12-01T00:00:00Z The Chinese economy has developed rapidly despite two major constraints: ill-functioning markets and a socialist past, both of which caused an environment of unenforceable contracts. In this situation the need to pool resources and to govern relational risk was paramount to the development of a private sector. While modern organisation (transaction cost-) theory can explain why and to which extent entrepreneurship in China is based on collective agents, an analysis of the (local) political market is needed to explain why China's villages provide the much needed (and valuable) public goods in form of property rights protection and contractual security. Decentralisation and jurisdictional competition facilitate the writing of a new "common law" as well as the "discovery" of new forms of collective action. http://repub.eur.nl/res/pub/43/ 2000-09-04T00:00:00Z Chinese entrepreneurs innovatively manage organisations in the absence of strong economic institutions, under conditions of high environmental and technological uncertainty. This paper presents the findings of an empirical study designed to investigate how Chinese entrepreneurs can be successful in such an environment. We found that Chinese entrepreneurial activity relies on social institutions rather than on economic institutions. We offer a sociological theory which explains why the reliance on social institutions leads to such an unprecedented success. We conclude that the strong rule-enforcement mechanisms generate reliable behavioral patterns, and that these in turn efficiently reduce uncertainty to tolerable levels.