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Models of trust-sharing in Chinese private enterprises

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  • Qin, Zhong
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    Abstract

    This paper presents two related models of development patterns of Chinese private enterprises. They illustrate incentive-based reasons for ownership arrangements of private enterprises, and highlight how institutional foundations of trust, particularly government and family-based cultural values, play an important role in influencing the development of private enterprises. These models attempt to explain why government and family-based culture are crucial for the ownership structure and management of private enterprises. The main argument in the models is that the structure of family businesses can be viewed, in essence, as a form of trust-sharing (Guanxi-sharing) arrangement within the firm. Furthermore, the increase in the prevalence of family businesses can be seen as a result of family trust replacing government trust in the firm's economic activities.

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    Bibliographic Info

    Article provided by Elsevier in its journal Economic Modelling.

    Volume (Year): 28 (2011)
    Issue (Month): 3 (May)
    Pages: 1017-1029

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    Handle: RePEc:eee:ecmode:v:28:y:2011:i:3:p:1017-1029

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    Web page: http://www.elsevier.com/locate/inca/30411

    Related research

    Keywords: Private enterprises in China Guanxi Government and family trust Corporate governance;

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    Cited by:
    1. Kai-Ping Huang, 2013. "Trustworthiness and ethical considerations: a review of personal connections in China," Quality & Quantity: International Journal of Methodology, Springer, vol. 47(5), pages 2723-2727, August.
    2. Safa, Nader Sohrabi & Ismail, Maizatul Akmar, 2013. "A customer loyalty formation model in electronic commerce," Economic Modelling, Elsevier, vol. 35(C), pages 559-564.

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