This study focuses on the ability for medium- and large-scale economic actors to set prices independent of state control in reform era China. Analysis of a random sample of firms in industrial Shanghai shows two significant findings. First, in support of theories of path dependence, a firm's position in the administrative hierarchy of the former command economy has a significant impact on the freedom the firm has to set prices; firms closer to the central government are significantly more likely to set pr-ices independent of state control. This finding offers a counter perspective to studies that have argued, based on a lack of gains in productivity, that reforms are not being enacted in the upper levels of China's industrial hierarchy. Second, firms are influenced by formal relationships with foreign joint venture partners, as those with joint venture partnerships are significantly more likely to set prices independent of state control. This finding offers empirical support for the idea that foreign investment has an on-the-ground impact on the decisions and practices of firms in China's transitional economy.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Length: pages Date of creation: 01 Feb 1998 Date of revision: Handle: RePEc:wdi:papers:1998-199
Contact details of provider: Postal: 724 E. University Ave. Wyly Hall, Floor 1, Ann Arbor, Michigan 48109-1234 Phone: 734 615 4566 Fax: (734) 763-5850 Email: Web page: http://www.wdi.umich.edu More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (Patricia Loh).
Related research
Keywords:
This paper has been announced in the following NEP Reports: