Developmental State and Corporate Governance in China

Victor NEE, Sonja OPPER, Man-lai, Sonia WONG

Research output: Journal PublicationsJournal Article (refereed)

98 Citations (Scopus)

Abstract

China’s state-guided economic miracle has revitalized a long-standing and unsettled debate about the role of government in transformative economic development. In a firm-level study of corporate governance we examine whether direct state involvement actually makes a positive contribution to the economic performance of newly incorporated firms in China’s urban economy. We show that direct intervention into the governance of firms is likely to yield negative economic effects at the firm level. We infer from our findings that it must be other types of government intervention external to the firm that explain the success of China’s developmental state in promoting rapid economic growth.
Original languageEnglish
Pages (from-to)19-53
Number of pages35
JournalManagement and Organization Review
Volume3
Issue number1
DOIs
Publication statusPublished - 1 Jan 2007

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Corporate governance
Developmental state
China
Economics
Economic development
Economic growth
Urban economy
Economic performance
Economic effect
Government intervention
Governance
Role of government

Keywords

  • market transition
  • politicized capitalism
  • soft-budget constraint
  • state-firm relations
  • firm performance
  • fiscal federalism

Cite this

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Developmental State and Corporate Governance in China. / NEE, Victor; OPPER, Sonja; WONG, Man-lai, Sonia.

In: Management and Organization Review, Vol. 3, No. 1, 01.01.2007, p. 19-53.

Research output: Journal PublicationsJournal Article (refereed)

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AU - OPPER, Sonja

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AB - China’s state-guided economic miracle has revitalized a long-standing and unsettled debate about the role of government in transformative economic development. In a firm-level study of corporate governance we examine whether direct state involvement actually makes a positive contribution to the economic performance of newly incorporated firms in China’s urban economy. We show that direct intervention into the governance of firms is likely to yield negative economic effects at the firm level. We infer from our findings that it must be other types of government intervention external to the firm that explain the success of China’s developmental state in promoting rapid economic growth.

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KW - firm performance

KW - fiscal federalism

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