IDEAS home Printed from https://ideas.repec.org/p/ems/eureri/7853.html
   My bibliography  Save this paper

Enterprise Ground Zero in China

Author

Listed:
  • Krug, B.

Abstract

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.

Suggested Citation

  • Krug, B., 2006. "Enterprise Ground Zero in China," ERIM Report Series Research in Management ERS-2006-024-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    • Handle: RePEc:ems:eureri:7853
    as

    Download full text from publisher

    File URL: https://repub.eur.nl/pub/7853/ERS-2006-024-ORG.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Andrei Shleifer, 1998. "State versus Private Ownership," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 133-150, Fall.
    2. Joseph E. Stiglitz, 1974. "Incentives and Risk Sharing in Sharecropping," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 41(2), pages 219-255.
    3. Dong, Xiao-yuan & Bowles, Paul & Ho, Samuel P. S., 2002. "The Determinants of Employee Ownership in China's Privatized Rural Industry: Evidence from Jiangsu and Shandong," Journal of Comparative Economics, Elsevier, vol. 30(2), pages 415-437, June.
    4. Seung Ho Park & Yadong Luo, 2001. "Guanxi and organizational dynamics: organizational networking in Chinese firms," Strategic Management Journal, Wiley Blackwell, vol. 22(5), pages 455-477, May.
    5. Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1998. "Law and Finance," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1113-1155, December.
    6. Casson, Mark, 2005. "Entrepreneurship and the theory of the firm," Journal of Economic Behavior & Organization, Elsevier, vol. 58(2), pages 327-348, October.
    7. Oliver E. Williamson, 2000. "The New Institutional Economics: Taking Stock, Looking Ahead," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 595-613, September.
    8. Williamson, Oliver E, 1993. "Calculativeness, Trust, and Economic Organization," Journal of Law and Economics, University of Chicago Press, vol. 36(1), pages 453-486, April.
    9. Gernot Grabher & David Stark, 1997. "Organizing Diversity: Evolutionary Theory, Network Analysis and Postsocialism," Regional Studies, Taylor & Francis Journals, vol. 31(5), pages 533-544.
    10. Yingyi Qian, 2002. "How Reform Worked in China," William Davidson Institute Working Papers Series 473, William Davidson Institute at the University of Michigan.
    11. Crouch, Colin, 2005. "Capitalist Diversity and Change: Recombinant Governance and Institutional Entrepreneurs," OUP Catalogue, Oxford University Press, number 9780199286652.
    12. Frye, Timothy & Shleifer, Andrei, 1997. "The Invisible Hand and the Grabbing Hand," American Economic Review, American Economic Association, vol. 87(2), pages 354-358, May.
    13. Witt, Ulrich, 2000. "Changing Cognitive Frames--Changing Organizational Forms: An Entrepreneurial Theory of Organizational Development," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 9(4), pages 733-755, December.
    14. Geertz, Clifford, 1978. "The Bazaar Economy: Information and Search in Peasant Marketing," American Economic Review, American Economic Association, vol. 68(2), pages 28-32, May.
    15. Cheung, Steven N S, 1969. "Transaction Costs, Risk Aversion, and the Choice of Contractual Arrangements," Journal of Law and Economics, University of Chicago Press, vol. 12(1), pages 23-42, April.
    16. Victor Nee, 2000. "The Role of the State in Making a Market Economy," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 156(1), pages 1-64, March.
    17. Greif, Avner, 1993. "Contract Enforceability and Economic Institutions in Early Trade: the Maghribi Traders' Coalition," American Economic Review, American Economic Association, vol. 83(3), pages 525-548, June.
    18. Qian, Yingyi, 2002. "How Reform Worked in China," CEPR Discussion Papers 3447, C.E.P.R. Discussion Papers.
    19. Nooteboom, Bart, 1999. "Innovation, Learning and Industrial Organisation," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 23(2), pages 127-150, March.
    20. David D. Li, 1996. "A Theory of Ambiguous Property Rights in Transition Economies: The Case of the Chinese Non-State Sector," William Davidson Institute Working Papers Series 8, William Davidson Institute at the University of Michigan.
    21. Steve Lovett & Lee C Simmons & Raja Kali, 1999. "Guanxi Versus the Market: Ethics and Efficiency," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 30(2), pages 231-247, June.
    22. Christian Lechner & Michael Dowling, 2003. "Firm networks: external relationships as sources for the growth and competitiveness of entrepreneurial firms," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 15(1), pages 1-26, January.
    23. Robert H. Bates & Avner Greif & Margaret Levi & Jean-Laurent, 1998. "Analytic Narratives," Economics Books, Princeton University Press, edition 1, volume 1, number 6355.
    24. Hongbin Li & Scott Rozelle, 2003. "Privatizing Rural China: Insider Privatization, Innovative Contracts, and the Performance of Township Enterprises1," Discussion Papers 00001, Chinese University of Hong Kong, Department of Economics.
    25. Xiao-yuan Dong & Louis Putterman & Bulent Unel, 2004. "Enterprise Restructuring and Firm Performance: A Comparison of Rural and Urban Enterprises in Jiangsu Province," William Davidson Institute Working Papers Series 2004-668, William Davidson Institute at the University of Michigan.
    26. Joseph E. Stiglitz, 1991. "Government, Financial Markets, and Economic Development," NBER Working Papers 3669, National Bureau of Economic Research, Inc.
    27. Li, David D., 1996. "A Theory of Ambiguous Property Rights in Transition Economies: The Case of the Chinese Non-State Sector," Journal of Comparative Economics, Elsevier, vol. 23(1), pages 1-19, August.
    28. Oecd, 2002. "Access for Business," OECD Digital Economy Papers 67, OECD Publishing.
    29. D. Stark, 1996. "Recombinant Property in East European Capitalism," Voprosy Ekonomiki, NP Voprosy Ekonomiki, vol. 6.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Krug, B. & Hendrischke, H., 2006. "Framing China: Transformation and Institutional Change," ERIM Report Series Research in Management ERS-2006-025-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Krug, B. & Hendrischke, H., 2006. "Framing China: Transformation and Institutional Change," ERIM Report Series Research in Management ERS-2006-025-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    2. Krug, B. & Hendrischke, H., 2006. "Institution Building and Change in China," ERIM Report Series Research in Management ERS-2006-008-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    3. Allen, Franklin & Qian, Jun & Qian, Meijun, 2005. "Law, finance, and economic growth in China," Journal of Financial Economics, Elsevier, vol. 77(1), pages 57-116, July.
    4. Sonin, Konstantin, 2003. "Why the rich may favor poor protection of property rights," Journal of Comparative Economics, Elsevier, vol. 31(4), pages 715-731, December.
    5. Djankov, Simeon & Glaeser, Edward & La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei, 2003. "The new comparative economics," Journal of Comparative Economics, Elsevier, vol. 31(4), pages 595-619, December.
    6. Peter Li, 2009. "The Duality of Crony Corruption in Economic Transition: Toward an Integrated Framework," Journal of Business Ethics, Springer, vol. 85(1), pages 41-55, March.
    7. Weiping Liu & Jiatao Li, 2019. "Unbalanced Institutions in Market Transition: How Do They Matter for Firm Strategic Choices and Performance in Emerging Economies?," Management International Review, Springer, vol. 59(5), pages 675-702, October.
    8. Ruifeng Liu & Zhifeng Gao & Yefan Nian & Hengyun Ma, 2020. "Does Social Relation or Economic Interest Affect the Choice Behavior of Land Lease Agreement in China? Evidence from the Largest Wheat−Producing Henan Province," Sustainability, MDPI, vol. 12(10), pages 1-19, May.
    9. Luis Alfonso Dau & Aya S. Chacar & Marjorie A. Lyles & Jiatao Li, 2022. "Informal institutions and international business: Toward an integrative research agenda," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(6), pages 985-1010, August.
    10. Licht Amir N., 2008. "Social Norms and the Law: Why Peoples Obey the Law," Review of Law & Economics, De Gruyter, vol. 4(3), pages 715-750, December.
    11. Walsh, Patrick Paul & Whelan, Ciara, 2001. "Firm performance and the political economy of corporate governance: survey evidence for Bulgaria, Hungary, Slovakia and Slovenia," Economic Systems, Elsevier, vol. 25(2), pages 85-112, June.
    12. repec:hal:spmain:info:hdl:2441/4vc7skecu3q7u7s984pgpg64m is not listed on IDEAS
    13. Zhang, Xiaobo, 2006. "Asymmetric property rights in China's economic growth," DSGD discussion papers 28, International Food Policy Research Institute (IFPRI).
    14. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2010. "Civic Capital as the Missing Link," NBER Working Papers 15845, National Bureau of Economic Research, Inc.
    15. Leonardo M. Klüppel & Lamar Pierce & Jason A. Snyder, 2018. "Perspective—The Deep Historical Roots of Organization and Strategy: Traumatic Shocks, Culture, and Institutions," Organization Science, INFORMS, vol. 29(4), pages 702-721, August.
    16. Krug, B. & Hendrischke, H., 2002. "Entrepreneurship in China: Institutions, organisational identity and survival: empirical results from two provinces," ERIM Report Series Research in Management ERS-2002-14-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    17. Brousseau, Eric & Schemeil, Yves & Sgard, Jérôme, 2010. "Bargaining on law and bureaucracies: A constitutional theory of development," Journal of Comparative Economics, Elsevier, vol. 38(3), pages 253-266, September.
    18. Frank A.G. den Butter, 2010. "Transaction Management: Value Creation by Reducing Transaction Costs," Tinbergen Institute Discussion Papers 10-051/3, Tinbergen Institute.
    19. Ran Abramitzky, 2015. "Economics and the Modern Economic Historian," NBER Working Papers 21636, National Bureau of Economic Research, Inc.
    20. Xingqiang Du, 2015. "Does Confucianism Reduce Minority Shareholder Expropriation? Evidence from China," Journal of Business Ethics, Springer, vol. 132(4), pages 661-716, December.
    21. Barbara Krug & Hans Hendrischke, 2012. "Market design in Chinese market places," Asia Pacific Journal of Management, Springer, vol. 29(3), pages 525-546, September.

    More about this item

    Keywords

    Chinese Business Sector; Entrepreneurship; Local Autonomy; Networking;
    All these keywords.

    JEL classification:

    • M - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • P3 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ems:eureri:7853. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: RePub (email available below). General contact details of provider: https://edirc.repec.org/data/erimanl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.