Chinese Enterprise Reform as a Market Process

The reform of China's enterprise system increasingly reflects the outcome of China's emerging property rights market. We distinguish between a centrally-directed reform strategy, with characteristics similar to those of a Pigouvian tax, and a market-driven reform process, which captures the essential features of a Coasian approach to social cost. The Coase Theorem postulates that eliminating transaction costs and attaching well specified property rights to public goods that generate externalities will allow uncoordinated economic agents to negotiate institutional arrangements that produce socially efficient allocation of resources. Extending Coase's reasoning to the case of socialist transition ' we argue that reforms that expand competition, move toward well-specified assignment of ownership rights to public enterprises, and reduce transaction costs will motivate the "ultimate" owners, including officials of national and sub-national government agencies, to reconfigure their assets or to combine their assets with those of other jurisdictions and/or private investors to create more efficient ownership arrangements. We review the extent to which China's reforms have established the conditions for an effective market in ownership rights to industrial property. We tabulate progress from 1 980 to present along the three major analytic dimensions inherent in Coase's analysis: competition, property rights, and transaction costs. We conclude that the sheer size and diversity of China's industrial economy will motivate a continuation of decentralized reform initiatives. To support this Coasian reform process, central and provincial governments need to expand initiatives to clarify property rights, particularly the right of alienation, reduce impediments to competition, and facilitate the reduction of transaction costs.http://deepblue.lib.umich.edu/bitstream/2027.42/39466/3/wp76.pd

Chinese Enterprise Reform as a Market Process

The reform of China's enterprise system increasingly reflects the outcome of China's emerging property rights market. We distinguish between a centrally-directed reform strategy, with characteristics similar to those of a Pigouvian tax, and a market-driven reform process, which captures the essential features of a Coasian approach to social cost. The Coase Theorem postulates that eliminating transaction costs and attaching well specified property rights to public goods that generate externalities will allow uncoordinated economic agents to negotiate institutional arrangements that produce socially efficient allocation of resources. Extending Coase's reasoning to the case of socialist transition ' we argue that reforms that expand competition, move toward well-specified assignment of ownership rights to public enterprises, and reduce transaction costs will motivate the "ultimate" owners, including officials of national and sub-national government agencies, to reconfigure their assets or to combine their assets with those of other jurisdictions and/or private investors to create more efficient ownership arrangements. We review the extent to which China's reforms have established the conditions for an effective market in ownership rights to industrial property. We tabulate progress from 1 980 to present along the three major analytic dimensions inherent in Coase's analysis: competition, property rights, and transaction costs. We conclude that the sheer size and diversity of China's industrial economy will motivate a continuation of decentralized reform initiatives. To support this Coasian reform process, central and provincial governments need to expand initiatives to clarify property rights, particularly the right of alienation, reduce impediments to competition, and facilitate the reduction of transaction costs.China, ownership, property rights, Coarse theorem, transition, merger, transaction costs

Chaotic Explosions

We investigate chaotic dynamical systems for which the intensity of trajectories might grow unlimited in time. We show that (i) the intensity grows exponentially in time and is distributed spatially according to a fractal measure with an information dimension smaller than that of the phase space,(ii) such exploding cases can be described by an operator formalism similar to the one applied to chaotic systems with absorption (decaying intensities), but (iii) the invariant quantities characterizing explosion and absorption are typically not directly related to each other, e.g., the decay rate and fractal dimensions of absorbing maps typically differ from the ones computed in the corresponding inverse (exploding) maps. We illustrate our general results through numerical simulation in the cardioid billiard mimicking a lasing optical cavity, and through analytical calculations in the baker map.Comment: 7 pages, 5 figure

R&D and Technology Transfer: Firm-Level Evidence from Chinese Industry

The capacity of developing economies to narrow the gap in living standards with the OECD nations depends critically on their ability to imitate and innovate new technologies. Toward this end, developing economies have access to three avenues of technological advance: technology transfer, domestic R&D, and foreign direct investment. This paper examines the contributions of each of these avenues, as well as their interactions, to productivity and knowledge production within Chinese industry. Based on a large data set for China’s large and medium-size enterprises, the estimation results show that technology transfer – whether domestic or foreign – affects productivity only through its interactions with in-house R&D. Foreign direct investment does not appear to facilitate the adoption of market-mediated foreign technology transfer. Firms wishing to produce patentable knowledge do not benefit from technology transfer; patentable knowledge is created exclusively through in-house R&D operations.http://deepblue.lib.umich.edu/bitstream/2027.42/39968/3/wp582.pd