Relational Incentives in Chinese Family Firms

This paper mainly discusses the choice of managerial compensation contracts in Chinese family firms. Relation or guanxi in Chinese language is an important factor that should be considered because it can bring the shirking cost to the relation-based manager and the caring cost to the owner under Chinese-style differential mode of association (“chaxu geju”). Our theoretical analysis shows that under some conditions it is optimal for the owner to choose the efficiency wage contract, and that under other conditions it is optimal for the owner to choose the share-based incentive contract.Managerial compensation, Efficiency wage contract, Share-based incentive contract, Relation (Guanxi), Chinese family firm.

A Political Pattern of China\u27s History: on Revolution, Reform, and Involution under Dictatorship

This paper aims to develop an integrated analytical framework for revolution, reform, and involution under dictatorship based on China’s history. In order to grasp the essence of political and economic interactions in historic China, this paper gets some abstract variables from China’s history, on the basis of which a political economy model is built. The autocrat plays an important role in determining authority form and development pattern, which endogenously brings about different outcomes of revolution, reform, and involution. When the economic system is closed, path-dependence plays an important role, however, when the system is open, we should not attach much importance to path-dependence

Istraživanje o izboru načina upravljanja u kineskim obiteljskim tvrtkama

This paper aims to investigate the choice of governance modes in Chinese family firms. For that purpose, we build a principal-agent model to conduct our analyses. There are two modes of governance that the owner of the family firm can choose from, either the relational governance or the professional governance. The choice of governance modes is embodied in managerial compensation under different contractual arrangements. Our theoretical analyses show that under some conditions it is optimal for the owner to choose the relational governance, while under other conditions it is optimal for the owner to adopt the professional governance. That is to say, the choice of governance modes is condition-dependentOvaj rad ima za cilj istražiti izbor načina upravljanja u kineskim obiteljskim tvrtkama. U tu svrhu primijenjen je model nalogodavca -zastupnika za provođenje analize. Postoje dva načina upravljanja koji vlasnik obiteljske tvrtke može odabrati, relacijsko upravljanje ili profesionalno upravljanje. Izbor načina upravljanja temelji se na menadžerskoj kompenzaciji pod različitim ugovornim uvjetima. Naše teorijske analize pokazuju da je u nekim uvjetima optimalno da se vlasnik opredjeljuje za relacijsko upravljanje, dok pod drugim uvjetima, optimalan izbor je profesionalno upravljanje. Naime, izbor načina upravljanja ovisi o uvjetima

Ekonomska analiza sustava političke promocije u Kini

This paper mainly discusses the political promotion system in China. Specifically, we develop a generalized analytical framework by introducing the contest success function. On the one hand, the central government can give the optimal political promotion benefits to local officials to incentivize them to exert desirable developmental efforts. On the other hand, the central government can undertake a further design of the political promotion system to motivate local officials via its assigned incentive strengths to the corresponding group and other groups, or via its stipulated number of comparable regions in the corresponding group. Our main findings in terms of the local official’s assigned weight to the political benefit are as follows. First, the individual developmental effort and the summed developmental efforts are increasing in the local official’s assigned weight to the political benefit. Second, the central government’s assigned incentive strength to other groups is increasing in the local official’s assigned weight to the political benefit. Third, the central government’s assigned incentive strength to the corresponding group is decreasing in the local official’s assigned weight to the political benefit. Fourth, the number of comparable regions in the corresponding group is decreasing in the local official’s assigned weight to the political benefit.U ovom se radu istražuje sustav političke promocije u Kini. Naime, razvijen je opći analitički okvir uz uvođenje funkcije uspješnosti natjecanja. S jedne strane, središnja vlada može pogodnosti optimalne političke promocije ustupiti predstavnicima lokalne vlasti kako bi ih potaknula na dodatni napor za ostvarivanje poželjnih razvojnih ciljeva. S druge strane, središnja vlada može se obvezati na daljnje osmišljavanje sustava političke promocije kako bi motivirala predstavnike lokalne vlasti dodjeljivanjem snažnih poticaja odgovarajućoj skupini i drugim skupinama, ili putem propisanog broja usporedivih regija u odgovarajućoj skupini. Glavni rezultati ovog istraživanja u svezi su pondera političke koristi predstavnika lokalne vlasti.. Prvo, pojedinačni i ukupni razvojni napori povećavaju ponder političke koristi predstavnika lokalne vlasti. Drugo, poticajna snaga središnje vlade dodijeljene ostalim skupinama utječe na povećanje pondera političke koristi predsatvnika lokalne vlasti. Treće, poticajna snaga središnje vlade dodijeljene odgovarajućoj skupini utječe na smanjivanje pondera političke koristi predstavnika lokalne vlasti. Četvrto, broj usporedivih regija u odgovarajućoj skupini smanjuje se u odnosu na ponder političke koristi predstavnika lokalne vlasti

Relational incentives in Chinese family firms

This paper mainly discusses the choice of managerial compensation contracts in Chinese family firms. Relation or guanxi in Chinese language is an important factor that should be considered because it can bring the shirking cost to the relation-based manager and the caring cost to the owner under Chinese-style differential mode of association (“chaxu geju”). Our theoretical analysis shows that under some conditions it is optimal for the owner to choose the efficiency wage contract, and that under other conditions it is optimal for the owner to choose the share-based incentive contract

AN ECONOMIC ANALYSIS OF THE POLITICAL PROMOTION SYSTEM IN CHINA

This paper mainly discusses the political promotion system in China. Specifically, we develop a generalized analytical framework by introducing the contest success function. On the one hand, the central government can give the optimal political promotion benefits to local officials to incentivize them to exert desirable developmental efforts. On the other hand, the central government can undertake a further design of the political promotion system to motivate local officials via its assigned incentive strengths to the corresponding group and other groups, or via its stipulated number of comparable regions in the corresponding group. Our main findings in terms of the local official’s assigned weight to the political benefit are as follows. First, the individual developmental effort and the summed developmental efforts are increasing in the local official’s assigned weight to the political benefit. Second, the central government’s assigned incentive strength to other groups is increasing in the local official’s assigned weight to the political benefit. Third, the central government’s assigned incentive strength to the corresponding group is decreasing in the local official’s assigned weight to the political benefit. Fourth, the number of comparable regions in the corresponding group is decreasing in the local official’s assigned weight to the political benefit

A Political Economy Pattern of China’s History: On Revolution, Reform, and Involution under Dictatorship

This paper aims to develop an integrated analytical framework for revolution, reform, and involution under dictatorship based on China’s history. In order to grasp the essence of political and economic interactions in historic China, this paper gets some abstract variables from China’s history, on the basis of which a political economy model is built. The autocrat plays an important role in determining authority form and development pattern, which endogenously brings about different outcomes of revolution, reform, and involution. When the economic system is closed, path-dependence plays an important role, however, when the system is open, we should not attach much importance to path-dependence

A Political Pattern of China\u27s History: on Revolution, Reform, and Involution under Dictatorship

This paper aims to develop an integrated analytical framework for revolution, reform, and involution under dictatorship based on China’s history. In order to grasp the essence of political and economic interactions in historic China, this paper gets some abstract variables from China’s history, on the basis of which a political economy model is built. The autocrat plays an important role in determining authority form and development pattern, which endogenously brings about different outcomes of revolution, reform, and involution. When the economic system is closed, path-dependence plays an important role, however, when the system is open, we should not attach much importance to path-dependence