Networks In Cultural, Economic and Evolutionary Perspective

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

Enterprise Ground Zero in China

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

Ties That Bind: the emergence of entrepreneurs in China

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

Public Finance in China since the Late Qing Dynasty

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

Kultur und Wirtschaftliche Entwicklung in China

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

The Interdependence Between Political and Economic Entrepreneurship

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

Do more placement officers lead to lower unemployment? : evidence from Germany

"In this paper we examine the effect of a pilot project of the German Federal Employment Agency, where in 14 German local employment offices the caseload (number of unemployed per caseworker) was significantly reduced. Since the participating local offices were not chosen at random, we have to take into account potential selection bias. Therefore, we rely on a combination of matching and a difference-in-differences estimator. We use two indicators of the offices' success (unemployment rate, growth of the number of SCIII clients). Our results indicate a positive effect of a lower caseload on both outcome variables." (Author's abstract, IAB-Doku) ((en))Arbeitsvermittlung - Erfolgskontrolle, Arbeitsvermittler - Modellversuch, berufliche Reintegration - Quote, Arbeitslosenquote, Arbeitsvermittlerquote

Entrepreneurship by Alliance

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)

The Hidden Cost of Ubiquity: Globalisation and Terrorism

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

China Incorporated

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