The Ownership School vs. the Management School of State Enterprise Reform: Evidence from China

There are two schools of thoughts on the important issue of reforming state-owned enterprises (SOEs). We call them the ownership school and the management school. The ownership school argues that the key to the reform is to diversify SOEs' ownership, including privatization, in order to eliminate government control of SOEs. The management school emphasizes the need to improve government's management of SOEs by, for example, granting SOE employees autonomy and profit incentives. Utilizing a data set of 680 SOEs in China, covering the period of 1980 to 1994, we test the relative effectiveness of these two kinds of reform measures. This is possible due to the fact that reform measures based on each of these two schools of thoughts were practised in China. Our results yield strong support for the ownership school while leaving very mixed evidence for the management school. Moreover, we find that the impact of ownership diversification was of the same order of magnitude on the economic performance of state enterprises as that of enhancing product market competition.http://deepblue.lib.umich.edu/bitstream/2027.42/39819/3/wp435.pd

The Ownership School vs. the Management School of State Enterprise Reform: Evidence from China

There are two schools of thoughts on the important issue of reforming state-owned enterprises (SOEs). We call them the ownership school and the management school. The ownership school argues that the key to the reform is to diversify SOEs' ownership, including privatization, in order to eliminate government control of SOEs. The management school emphasizes the need to improve government's management of SOEs by, for example, granting SOE employees autonomy and profit incentives. Utilizing a data set of 680 SOEs in China, covering the period of 1980 to 1994, we test the relative effectiveness of these two kinds of reform measures. This is possible due to the fact that reform measures based on each of these two schools of thoughts were practised in China. Our results yield strong support for the ownership school while leaving very mixed evidence for the management school. Moreover, we find that the impact of ownership diversification was of the same order of magnitude on the economic performance of state enterprises as that of enhancing product market competition.State-Owned Enterprise, Privatization, Gradual Privatization, Managerial Reform, Enterprise Restructuring, Managerial Autonomy, and Managerial Incentives

The Colour of the Cats

China has experimented with two strategies of reform of its state-owned enterprises (SOE). One is diversification of SOEs’ ownership through introducing non-state sources of investment. Another is to improve the management of SOEs by granting SOEs’ managers autonomy and their employees profit incentives. Utilising a data set on 680 SOEs over 1980-94, we tested the relative effectiveness of two kinds of reform measures. Our results show that ownership diversification had a significant impact on the performance of SOEs while efforts to improve SOE’s management had very little effect. Moreover, the impact of ownership diversification on SOE’s economic performance was as strong as that of enhancing product market competition.

Revenue Sharing and Control Rights in Team Production: Theories and Evidence from Joint Ventures.*

This paper presents a model of the joint venture that is grounded in the stylized facts we found from a sample of 200 joint venture contracts. The model incorporates the revenue-sharing contract into the incomplete contract frameworks of Grossman-Hart-Moore Property Rights Theory and the Transaction Cost Theory of the firm, and emphasizes the impact of expropriation. Joint control can be optimal as well as unilateral control. Our econometric analysis of the revenue-sharing and control arrangements o?ers strong support to our Property-Rights-Theory motivated model with self investment but rejects that with cooperative investment. The Transaction-Cost-Theory motivated model leaves some important empirical findings unexplained. Our findings also reject some of the existing theories of joint ownership.http://deepblue.lib.umich.edu/bitstream/2027.42/39948/2/wp563.pd

Revenue Sharing and Control Rights in Team Production: Theories and Evidence from Joint Ventures.*

This paper presents a model of the joint venture that is grounded in the stylized facts we found from a sample of 200 joint venture contracts. The model incorporates the revenue-sharing contract into the incomplete contract frameworks of Grossman-Hart-Moore Property Rights Theory and the Transaction Cost Theory of the firm, and emphasizes the impact of expropriation. Joint control can be optimal as well as unilateral control. Our econometric analysis of the revenue-sharing and control arrangements o?ers strong support to our Property-Rights-Theory motivated model with self investment but rejects that with cooperative investment. The Transaction-Cost-Theory motivated model leaves some important empirical findings unexplained. Our findings also reject some of the existing theories of joint ownership.Joint Ventures, Control Right, Revenue-Sharing Contracts, Expropriation, Theory of the Firm

Expropriation and Incentives for Team Production

Recent research suggests that expropriation by controlling shareholders of other shareholders is an important problem in both publicly held and closely held firms. This paper examines how partners in closely held firms can make control-right arrangements to mitigate expropriation and other incentive problems. We further analyze the interaction between revenue-sharing contracts and control-right arrangements and investigate how the former also helps in dealing with the aforementioned set of problems. Our theoretical results are consistent with the stylized facts that we find from a sample of 200 joint-venture contracts.

Hong Kong's Business Regulation in Transition

The transition of Hong Kong's main economic activities from manufacturing to services is accompanied by gradual changes in the regulatory regimes for monopolies. The local telecommunication services industry has been liberalized, deregulation of public transport is taking shape, and the schemes of control for electricity suppliers are candidates for reform. In this paper, we review the evolution of business regulation in Hong Kong, analyze the salient features of its scheme of control regulation and evaluate the impact of transition from regulation to competition. To provide a sharp contrast between the difficulties of the traditional approach to regulation and the benefits of introducing competition, we focus on the cases of electricity and telecommunications. The direction for future changes is also discussed.

Application of infraorbital rim augmentation with pocket fat filling to correct tear trough deformity

BackgroundTear trough deformity is one of the most common complaints in clinical settings. The correction of this groove is challenging in facial rejuvenation. The lower eyelid blepharoplasty varies with different conditions. A novel approach of using orbital fat in the lower eyelid to increase the volume of the infraorbital rim with granule fat injection has been applied in our institution for more than 5 years.ObjectivesThis article aims to describe the detailed steps of our technique and verify its effectiveness by a cadaveric head dissection after surgical simulation.MethodsIn this study, a total of 172 patients with tear trough deformity underwent lower eyelid orbital rim augmentation with fat filling in the sub-periosteum pocket. According to Barton's grades, 152 patients underwent lower eyelid orbital rim augmentation with orbital fat filling, 12 patients had it combined with autologous granule fat from other body parts, and 8 patients received only transconjunctival fat removal to correct tear trough.ResultsThe modified Goldberg score system was used to compare preoperative and postoperative photographs. Patients were satisfied with the cosmetic results. Excessive protruding fat was released, and the tear trough groove was flattened by using autologous orbital fat transplantation. The lower eyelid sulcus deformities were well-corrected. To further illustrate the anatomical structure of the lower eyelid area and injection layers, six cadaveric heads were used for surgical simulation and demonstrated the effectiveness of our technique.ConclusionsThis study indicated that the infraorbital rim could be increased by transplanting orbital fat to the pocket, which was dissected under the periosteum, and the procedure has been verified as reliable and effective.Evidence-based medicine (EBM) levelLevel II