80,309 research outputs found

    Employee motivation, external orientation and technical efficiency of foreign-financed firms in China: a stochastic frontier analysis

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    By using a stochastic frontier model, we have identified several firm-specific attributes as determinants of technical efficiency in foreign-financed manufacturing firms in southern China. The empirical results suggest a strong association between efficiency and employee motivation, which includes the use of bonus incentives and flexibility in employment policy. In terms of the external orientation behavior of firms, the findings do not support the export/efficiency relationship. Sample firms with a high degree of export-orientedness were less efficient, possibly due to the high transaction costs in China of exportation. As for the effects of expatriate input on production, our empirical evidence revealed that firms with a relatively high expatriate ratio performed less efficiently than others did. These two findings may have significant implications for the marketing strategies and management (including the localization) of human resources of foreign-financed firms in China

    Making Sense of China’s Economic Transformation

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    China’s sustained rapid economic growth over the post-1978 reform era, which is also the era of globalisation, is of worldwide importance. This growth experience has been based mainly on China’s internal dynamics. In the first half of the era, economic growth was propelled by improvement in both allocative efficiency and productive efficiency. From the early 1990s until the present time, however, economic growth has been increasingly based on dynamic increasing returns associated with a growth path that is characterised by capital deepening. In both periods, the growth paths and their associated long-term-oriented institutions contradict principles of the free market economy – i.e., doctrines of globalisation. In the form of an analytical overview, this article seeks to explain and interpret the historical background, logic of evolution, and developmental and social implications of China’s economic transformation. The analytics draws on a range of relevant economic theories including Marxian theory of economic growth, Post-Keynesian theory of demand determination, and Neo-Schumpeterian theory of innovation. It is posited that these alternative theoretical perspectives offer better insights than mainstream neoclassical economics in explaining and interpreting China’s economic transformation

    Explaining the Financial Performance of China's Industrial Enterprises: Beyond the Competition-Ownership Controversy

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    Scholarly explanations of the worsening financial performance of Chinese industry over the reform era, particularly the loss-making phenomenon, have coalesced around two rival stories: the “inefficient institutions causing poor financial performance” story and the “increased competition inducing profitability decline” story. This article critically reviews the arguments and empirical substantiation of the two stories, and gives an alternative explanation that takes demand conditions and industrial configurations into the analysis. On this basis, it is argued that the worsening financial performance is a macro as well as micro problem that points to the fundamental contradictions in contemporary Chinese political economy. Some policy implications from this analysis are raised in the concluding section

    Promoting fair globalization in textiles and clothing in a post-MFA environment

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    The working paper reports on the current trade conditions in the textile clothing industry in the post Multifibre Agreement era. Additionally, the paper advocates for a fairer globalization, promoting better work conditions, labor wages and general social equality in producer countries

    China, India and Russia: economic reforms, structural change and regional disparities

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    This paper studies the different patterns of growth of China, India and Russia by exploring and comparing the processes of reforms that have generated and accompanied their high and sustained rates of growth. Focusing on the sector transformations involved into the three economies, we show that the growth strategies implemented present specific characteristics in terms of gradualism and policy choices. We analyze the effects of economic growth on regional income disparities and to what extent the recent increase in prosperity has been homogeneously distributed within the three giants. Making use of Theil's T statistics and transition probability matrices, our findings reveal that income disparities within the Indian states and Chinese provinces have increased and, more in particular, landlocked and rural areas are in general still far from reducing the income gap from coastal and richest regions. In the case of Russia, the great divide is fuelled by the presence of hydrocarbons resources, which tend to be concentrated in the West Siberia

    The Reform of Employee Compensation in China’s Industrial Enterprises

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    Although employee compensation reform in Chinese industrial sector has been discussed in the literature, the real changes in compensation system and pay practices have received insufficient attention and warrant further examination. This paper briefly reviews the pre- and post-reform compensation system, and reports the results of a survey of pay practices in the four major types of industrial enterprises in China. The research findings indicate that the type of enterprise ownership has little influence on general compensation practices, adoption of profit-sharing plans, and subsidy and allowance packages. In general, pay is linked more to individual performance and has become an important incentive to Chinese employees. However, differences are found across the enterprise types with regard to performance-related pay. Current pay practices are positively correlated to overall effectiveness of the enterprise

    China, the ‘East Asian Model’ and Late Development

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    There is an influential, neo-liberal proposition in the scholarly literature on China’s economic transformation since the late 1970s. It states that China’s reformed economic institutions are a mix of market-conforming and market-supplanting elements, that its developmental achievements so far have been ascribable to the conforming elements whereas the accumulated problems being ascribable to the supplanting elements, and that the problems have tended to outweigh the achievements as the country’s economic transition progresses from the allegedly easy phase to the difficult phase. This paper offers an alternative interpretation of the Chinese experience. The central proposition is that China’s economic institutions could be seen in favourable light both theoretically and with reference to the East Asian development experience. Specifically, the developmental implications of the market-conforming and market-supplanting elements should not be understood in any absolute sense, but rather depend on the appropriate match or otherwise between the institutions and the external environment. The developmental achievements to date indicate that China’s economic reform has managed to achieve a basically appropriate match between the two aspects, although enormous uncertainties still cloud over the future prospects owing to changes both in the external environment and the reform strategies of the state leadership

    How do Financial Institutions in China Mitigate Risks in Securitization Markets?

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    Asset securitization as the essential financial tool has increased the liquidity of underlying assets and promoted rapid economic development. In 2008, the outbreak of Subprime Mortgage Crisis that brought by the collapse of securitization triggered the U.S. securitization market to realize the risks involved in structured financial products, and thus facilitated the development of risk controlling tools. Through the analysis of securitization process, drivers, and credit rating agencies, the study concentrates on the formation of risks and modeling evaluation with evidence in both China and the U.S. markets. Statistical analysis was conducted on Chinese securitized products combining with risk management models built in the U.S. market. The results not only show risk evaluation tools that could improve the market maturity but also reveals the lack of information disclosure in China with the limited access to historical data. The paper attempts to address policy recommendations on mitigating potential risks and promoting financial developments in the China securitization market

    Total Factor Productivity Growth in Chinese Industry: 1952-2005

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    This paper presents a timely assessment of Chinese industrial productivity performances over the period 1952-2005. The total factor productivity (TFP) growth analysis is based on a Cobb-Douglas specification with aggregated annual data set. This study tackles some theoretical and methodological issues raised by critics of previous studies. First of all, the use of economic tools allows us to relax some restrictive hypothesis of the neoclassical growth framework such as competitive market behaviour, constant returns to scale production technology and Hicks neutral technological change. In addition, our TFP growth estimates are adjusted for business fluctuations. The paper also deals with the autocorrelation issue prevailing in most previous studies. Our major findings are: (i) In Chinese industry, between 1952 and 2005 capital accumulation has been the main engine of economic takeoff. (ii) During the post-reform period, TFP growth contributed significantly to economic growth. (iii) TFP gains have exhibited a sharply increasing pattern since the late 1980’s, along with the accelerated integration of China into the world economy.

    Macro-financial Linkage and Financial Deepening in China after the Global Financial Crisis

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    As China's economic integration with the global economy deepens, the amount of capital flow to/from China has been increasing significantly, especially since it joined the WTO. In spite of such environment, the recent global financial crisis has not severely affected the Chinese financial markets because of China's relatively strict control of cross-border capital transactions and its strong economic and financial fundamentals. The government's stimulus policies worked effectively to realize a quick recovery of the country's economic growth. However, on the horizon, the factors that protected the Chinese economy during the crisis also seem to carry with them substantial risks and challenges to its sustainable growth. This paper reviews the factors that have kept the Chinese economy and financial markets relatively stable and analyzes the recent changes in China's macro financial linkage overseas, and highlights the challenges that China faces in realizing a sustainable and efficient economic development.Macro-financial Linkage, Financial Deepening, Cross-border Capital Flow, Bank Lending
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