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Nature Of The Firm: A Study On Developers In China And Hong Kong


  • Rita YI MAN LI


In Hong Kong, dwellings are fitted with neat and tidy paintings, well decorated floor and wall tiles. Equipped with world�renowned kitchen and bathroom appliance, housing owners can move in with a bag of cloths. Builders in China, however, only provide fundamental elements such as windows, doors, ironmongery and grayish wall. By the time home purchasers receive their dwellings, they need to do a lot of shopping before they can move in. They need to buy water closet, tiles, towel rings and so on. Scope of services provided by Hong Kong developers is much wider than those in China�s. Ronald Coase, Nobel economist 1991 addresses two questions in his 1937 paper: why firms exist and what determines their scale and scope. What are the major determining factors which affect the size of the developers and their scope of services? Few or even no paper has studied this issue. This paper reviews that unpredictable rules and regulations couple with poor law drafting decrease firms� incentive in vertical integration.

Suggested Citation

  • Rita YI MAN LI, 2008. "Nature Of The Firm: A Study On Developers In China And Hong Kong," Journal of Applied Economic Sciences, Spiru Haret University, Faculty of Financial Management and Accounting Craiova, vol. 3(4(6)_Wint).
  • Handle: RePEc:ush:jaessh:v:3:y:2008:i:4(6)_winter2008:45

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    References listed on IDEAS

    1. Jane S. Pollard, 2003. "Small firm finance and economic geography," Journal of Economic Geography, Oxford University Press, vol. 3(4), pages 429-452, October.
    2. Lam Yow Thim & Chen Zonggui, 2004. "The development of the construction legal system in China," Construction Management and Economics, Taylor & Francis Journals, vol. 22(4), pages 347-356.
    3. Cordes, Christian & Richerson, Peter J. & McElreath, Richard & Strimling, Pontus, 2008. "A naturalistic approach to the theory of the firm: The role of cooperation and cultural evolution," Journal of Economic Behavior & Organization, Elsevier, vol. 68(1), pages 125-139, October.
    4. Kathleen R. Conner & C. K. Prahalad, 1996. "A Resource-Based Theory of the Firm: Knowledge Versus Opportunism," Organization Science, INFORMS, vol. 7(5), pages 477-501, October.
    5. Kay, Neil, 2000. "Searching for the Firm: The Role of Decision in the Economics of Organizations," Industrial and Corporate Change, Oxford University Press, vol. 9(4), pages 683-707, December.
    6. Coase, R H, 1988. "The Nature of the Firm: Origin," Journal of Law, Economics, and Organization, Oxford University Press, vol. 4(1), pages 3-17, Spring.
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    firm; developers; Hong Kong; China;


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