An alternative to privatization of transition economy state-owned enterprises : the case of China

Version of RecordRecent literature has focused on privatization in addressing the issue of making state-owned enterprises (SOEs) more competitive in the global marketplace. As a result, a number of SOEs have been privatized in many transition economies. Unfortunately, there have not been major performance improvements in the aftermath of privatization within these contexts. Therefore, we are interested in exploring whether privatization is an incomplete or maybe even erroneous solution to making transition economy SOEs more competitive. Using China as an illustration, this paper analyzes the possibility of employing contractual incentives as an alternative strategy in conquering SOE inefficiency, and proposes that a well-designed incentive system will work as an effective countermeasure as opposed to straightforward privatization in solving the SOE problems in transition economies.Wang, L. (2007, October). An Alternative to Privatization of Transition Economy State-Owned Enterprises: The Case of China. Presented at the Academy of International Business U.S. Northeast Chapter Regional Meeting, Portsmouth, New Hampshire. Retrieved from http://academicarchive.snhu.ed

The determinants of farm investment and residential construction in post-reform China

The objective of this paper is to clarify, on the basis of detailed farm level data derived from recent surveys,the importance of factors related to tenure security, farm size and credit availability in constraining farmers'agricultural investment. In particular, a direct measure of farmers'perceptions regarding tenure security will be utilized, as well as information on transactions in the credit market. The next section provides a description of the study areas. It is followed by a discussion of factors affecting farm investment and a description of investment patterns in the study areas. A formal model of farmers'consumption and investment decisions, and an econometric analysis are then presented and results are interpreted. The last section summarizes the paper.Environmental Economics&Policies,Economic Theory&Research,Banks&Banking Reform,International Terrorism&Counterterrorism,Agricultural Knowledge&Information Systems

Economics as a fundamental factor in the formation of law

In the modern world, taking into account modern trends and processes that deeply affect social behavior, law, as an institution regulating social behavior, is also changing, but nevertheless, the institute of law is experiencing difficulties with responding to modern trends and processes, to a greater extent, due to the inability of researchers and specialists in the field of law to determine the boundaries to solve the problems of law, as well as to determine the consequences and predict the impact of the implementation of a particular law on the social behavior of individuals. Thus, this study, describing and constructing a model of social response to legal changes by using the principles of microeconomic theory, revealed that the model provided by the interdisciplinary stream "Law and Economics" is relevant for determining and responding to current trends, since the elements of microeconomic theory are able to accurately predict the impact of a particular law on social behavior, thereby arguing that when considering and implementing a particular law, it is necessary to be based on economic principles, since they are able to accurately simulate the influence of the institution of law on all aspects of the behavior of individuals in society

Decomposition of the efficiency of the Chinese state-owned commercial banks at the provincial level

This study adopts a bank production function approach to the measurement of banking efficiency at the provincial level in the Chinese state-owned commercial banking sector from 1998 to 2003. Applying Data Envelopment Analysis and efficiency decomposition analysis, this paper has revealed a significant level of pure technical input inefficiency and, to a lesser extent, scale inefficiency across the provincial branches of all the banking groups. The study has also uncovered the extent of inefficiency in individual banking inputs and provincial branches. Finally, the provincial-level efficiency is further decomposed into within-banking-group and between-banking-group effects

Transportation research needs and issues for Chinese agriculture

Interprovincial circulation of grain and wholesale markets in China / Wu Shuo -- Inter-state/province grain transportation in the U.S. and China / Tenpao Lee, Robert J. Hauser, Stanley R. Thompson, and Barbara J. Hrutka -- Methodology and data systems for study of transportation / Won W. Koo and Jerry Fruin -- An application of a spatial equilibrium model to analyze the impact on China's trade of a policy change / Shwu-Eng H. Webb, Catherine K. Halbrendt, Rajaram Gana, and Francis Tuan -- Possible Joint Chinese and U.S. grain transportation and distribution research opportunities / Roland R. Robinson and Donald W. Larson -- Transportation research needs and issues for Chinese agriculture: discussion of session presentations / Dale G. Anderso

China’s New Development Strategy: Environment and Energy Security

This paper analyzes China's development strategy by focusing on both global and regional approaches to solving problems of energy security and ecological imbalance by addressing specifically the problems of China’s energy security. PRC’s growing energy dependence has become a major concern for both economic and national security policymakers in that country. The ambitious goal of modernization of the economy along the lines of the other newly industrialized economies(NIEs) of Asia has succeeded only too well, and it is difficult to reorient economic priorities. If examined rigorously, such an economic strategic assumption can be seen to entail the goal of creating further technological capabilities. In particular, China seems to be firmly committed to the creation of a largely self-sustaining innovation system as part of a knowledge-based economy of the future . Such innovation systems, called positive feedback loop innovation systems or POLIS have been created by advanced countries, and NIEs such as South Korea and Taiwan are proceeding to create these as well. But this will add to its energy burden and further dependence on the US as the power which controls the key sea lanes. Only a strategic reorientation to building a self-sustaining POLIS and appropriate regional cooperation institutions can lead to the way out of the current dilemma for China. Fortunately, such a model of POLIS which is distributionally and ecologically sensitive can be built for China and applied strategically to lead towards a sustainable development trajectory. However, time is of the essence. Given the path dependence of development unless strategic disengagement from the existing path followed by a strategic engagement with the alternative strategy is begun within the next five years, it may well be too late. The stakes are indeed very high. A more detailed strategy paper based on the key ideas from the alternative strategy outlined here with concrete quantitative scenarios and feasibility studies along the lines of models sketched in the appendix ( and other, more detailed models) will go some distance towards giving the appropriate analytical foundations for the policy makers. The preliminary results confirm the predictions regarding fossil fuel-based energy shortage and lead towards a serious consideration of alternative energy sources. Achieving the twin goals of energy security and ecological balance are challenging but not impossible for China. Serious policy research can be used effectively if there is the political will to do so. The goal of regional cooperation is also achievable if patient negotiations in good faith can start in earnest. In particular, cooperation with other Asian economies, particularly Japan, Indonesia, Viet Nam and India will be crucial.This paper has sketched out the complexities of cooperation and conflict between China and Japan. Future work will address the problems of Regional cooperation for China in the East, South and South Asian context as well as in the context of Africa and Latin America.China, Development Strategy, Energy, Environment, POLIS, Innovation System, Regional Cooperation

The emergence of clusters in societal transition : a coevolutionary perspective on the TCM cluster at Tonghua/China

New industries are recognized as new impetus to national wealth. At the same time, they are increasingly becoming geographically concentrated in some well defined areas. But current studies on the emergence of industrial clusters tend to analyze favorable driving factors. This dissertation takes the example of a Chinese endogenous industrial cluster, the traditional Chinese medicine (TCM) cluster at Tonghua, a small peripheral city in Northeastern China, to contribute to the theoretical understanding of the emergence of industrial cluster as a co-evolutionary process of organizations, institutions and firms, or, to put it more broadly, as economic evolution embedded in complex socio-economic contexts. The recent advance in evolutionary and co-evolutionary economics which considers the economy and economic landscape as dynamic process instead of equilibrium can be regarded as a part of broader and more intellectual turn of quest for history in social sciences. Although the principle of "history matters" is widely acknowledged, it tends to be reduced to a quite simple concept of "path dependence". However, path dependence cannot offer space for new path creation, except from an external shock. Accordingly, the role of human conscious action or Schumpeterian innovation should be added to path analysis through the concept of path creation. Furthermore, and more importantly, history should be understood as context, and historical context can be explored through the understanding of multi-paths and interaction among them over time. So path inter-dependence (co-evolution between paths) would be useful to better understand the complexity of real history. Since the industrial cluster is composed of interconnected firms and is also subject to changes in institution and technology, I will focus on the multi-way causal relationship between firm, institution and technology. The theorizing is not entirely new, but most of the theoretical and empirical discussions are at the national or industrial level, not regional or local one. A competitive cluster can be regarded as a co-evolutionary hotspot in which multiple populations actively interact and are interconnected. Co-evolution itself is a dynamic and evolutionary process. So I will adopt a dynamic and evolutionary view to examine co-evolutionary degree or co-evolutionary effects in the Tonghua pharmaceutical cluster through time. After a brief introduction which deals with the national institutional changes that are highly associated with new venture creation, entrepreneurship, and innovation, with registrations on drug and healthcare system, and with changes in market demand of China’s pharmaceutical industry and geographical distribution, I will collect evidences from three aspects based upon field survey and second hand data, i.e., the history of the enterprises, the origin of entrepreneurship, and the knowledge of evolution, linking their respective generative relationships through the genealogical method. In this volume, the evolution of the Tonghua pharmaceutical firm organization, the formation of local entrepreneurship, historical accumulation of knowledge, and particular knowledge of transfer among generations of firms will be discussed, then I will probe into co-adaption and co-evolution between local formal and informal institutions and organizations in Tonghua’s TCM industry. In addition, I will try to understand the co-evolutionary process at different geographical levels (namely, national and local). In summary, my main findings include the following several points. Firstly, in the course of the emergence of Tonghua’s pharmaceutical industry, local social networks and the traditional alliance between enterprises and government have played important roles. Secondly, the most important factor that influences the evolution of endogenous industrial clusters such as the Tonghua pharmaceutical industry in transitional countries is not the change in technology, but the change in fundamental national institutions. Thirdly, the success of the Tonghua pharmaceutical industry can be ascribed to the creation of multiple paths largely based on initial conditions, which implies that economic policy should have historical consciousness, namely, new economic innovation should make full use of both historical legacies and existing assets. Finally, it is co-adaption and co-selection of firm organization, institution, and technology that have jointly made Tonghua’s pharmaceutical industry become highly competitive, which means that whether one region can grasp new opportunities partially depends on its capabilities to coordinate a varity of development agents.Neue Industrien werden im Allgemeinen als Impuls der Entwicklung zu nationalem Wohlstand verstanden. Zugleich sind sie überwiegend an einigen geographisch genau definierten Orten konzentriert. Aktuelle Studien zur Emergenz dieser Industrie-Cluster neigen dazu, entsprechende begünstigende Faktoren zu analysieren. Mit dem Beispiel eines endogenen Clusters in China, dem Cluster der Traditionellen Chinesischen Medizin (TCM) in Tonghua, will diese Dissertation zum theoretischen Verständnis der Emergenz von Industrie-Clustern unter der Perspektive eines ko-evolutorischen Prozesses von Form der Organisation, Institutionen und Unternehmen beitragen. Oder, um es etwas breiter auszudrücken, diese Emergenz als ökonomische Evolution zu verstehen, die in einen komplexen sozio-ökonomischen Kontext eingebettet ist. Obgleich der Vorstellung, Geschichte habe eine Bedeutung („history matters“), überwiegend in der Forschung zugestimmt wird, bleibt diese oft auf das Konzept der Pfadabhängigkeit beschränkt. Das aber eröffnet keinen Raum für die Betrachtung endogener Pfad-Bildung. Dem Konzept der Pfad-Bildung entsprechend sollte jedoch die Pfadanalyse ergänzt werden um bewusste Handlungen des Menschen oder auch um Innovationen im Schumpeterschen Sinn. Wichtiger ist außerdem, dass Geschichte als ein Kontext verstanden werden sollte, in dem mehrere Pfade ko-existieren und im Zeitverlauf auch interagieren. So wäre ein Konzept der Pfad-Interdependenz (oder der Ko-Evolution von Pfaden) nützlich zum besseren Verständnis der Komplexität „wirklicher“ Geschichte. Weil das Industriecluster sich aus untereinander verflochtenen Unternehmen zusammen setzt und zugleich Gegenstand von Änderungen in den Institutionen und der Technologie ist, konzentriert sich die Dissertation auf vielseitige kausale Beziehungen von Unternehmen, Institutionen und Technologie. Ein wettbewerbsfähiges Cluster kann aus geographischer Sicht als ein „hot spot“ der Ko-evolution betrachtet werden, in dem verschiedenartige Populationen aktiv untereinander agieren und daher miteinander verflochten sind. Ko-Evolution selbst ist dann ein dynamischer und evolutorischer Prozess. Die Arbeit wählt diese Perspektive, um das Maß und die Wirkungen der Ko-Evolution im Pharma-Cluster von Tonghua im Zeitverlauf zu analysieren. Die Dissertation fußt auf empirischen Erhebungen, ergänzt um eine Dokumenten-Analyse, zur Geschichte der Unternehmen, der Herkunft der Unternehmerschaft sowie der Evolution von Wissen. Sie diskutiert die Evolution in den Organisationsformen der Pharma-Unternehmen in Tonghua, die Bildung einer lokalen Unternehmerschaft, die historische Akkumulation von Wissen und den besonderen Wissenstransfer zwischen Generationen von Unternehmen. Schließlich untersucht sie die Ko-Adaption und Ko-Evolution von lokalen formalen und informellen Institutionen und Organisationen der TCM-Industrie in Tonghua. Die folgenden Punkte betreffen die wichtigsten Ergebnisse der Dissertation: Erstens haben sehr langfristige und dichte lokale soziale Netzwerke eine erhebliche Rolle im Lauf der Emergenz der Pharma-Industrie in Tonghua gespielt. Zweitens ist der wichtigste Faktor in der Pharma-Industrie nicht im technologischen Fortschritt durch Anstrengungen bei Forschung und Entwicklung (FuE) zu sehen, sondern im institutionellen Wandel sowohl auf nationaler als auch auf lokaler Ebene. Drittens kann der Erfolg der Pharma-Industrie in Tonghua der Bildung multipler Pfade zugeschrieben werden, die auf bestimmten Anfangsbedingungen gründen. Das bedeutet, dass die neue ökonomische Entwicklungspolitik sowohl das historische Erbe als auch bestehende Aktivposten in vollem Umfang nutzen sollte. Schließlich ist festzustellen, dass Ko-Adaption und Ko-Selektion der Unternehmens-Organisation, von Institutionen und Technologie zusammen die Pharma-Industrie von Tonghua in hohem Maße wettbewerbsfähig gemacht haben. Ob eine Region neue Gelegenheiten ergreifen kann, hängt folglich teilweise von ihrer Fähigkeit ab, eine Vielfalt von Entwicklungs-Agenten zu koordinieren