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Lawrence Peter King. Westport, CT: Praeger, 2000. 168 pp. $59.50. It has been more than a decade since the fall of communism in Eastern Europe and even longer that these [...]

abstract Since the mid 1990s the State-Owned Assets Supervision and Administration Commission (SASAC) has emerged as a key institution governing firm ownership in China, but its impact on firm performance is understudied. Through an analysis of Chinese firms listed on the Shanghai and Shenzhen stock exchanges from 1994-2003, we examine how the changing ownership patterns following the rise of SASAC influenced firm performance. We have three findings. First, contrary to the popular view that state ownership in China's listed firms has declined, we find that the state shares have been moved from the original state offices to the SASAC in the format of 'state institutional shares'. Second, compared with the old state shares, the SASAC institutions affect firm performance more positively. Third, after controlling for state and SASAC ownership, ownership concentration is a strong positive factor in firm performance. Our findings fit squarely within a long tradition of agency theorists who argue that ownership concentration helps solve the free-rider problem and thus has positive effects on firm performance. However, we focus on the ways in which ownership concentration allows firm owners to monitor and stabilize firm behaviour, which has more important implications for emerging economies such as China's domestic capital markets. [ABSTRACT FROM AUTHOR]

How do corporations define their communities? Corporate social responsibility (CSR) is one issue that may help us to answer this question. We argue that CSR represents actively adopted strategies in response to the pressures corporations face in the local institutional environments in which they are embedded, where corporations define geographically situated institutional variations as community. We show corporations (especially publicly traded corporations) have been aggressive in adopting CSR practice when they are located in (1) areas high in union density or (2) federal appellate jurisdictions that have been aggressive in protecting workers' rights, while being far less philanthropic if located in Right-to-Work jurisdictions. Drawing on research in neoinstitutional analysis, we interpret these findings to indicate corporations respond to localized union strength by adopting strategies that allow them to appear responsive to their social contract, and hence legitimate. Interestingly, corporations appear more concerned with their community's union strength than with regard to their own particular union exposure, at least as related to CSR practices. [ABSTRACT FROM AUTHOR]

We discuss the ways in which the tensions between deregulation and bailouts create fundamentally inefficient markets. Although there is an appetite for the rhetoric of a laissez-fair economic system in the United States, we do not have the political will to operate such a system, as there are always, cries for bailouts when a crisis emerges. And bailouts rob markets of the crucial ability to discipline capital for risky behavior. Using the case of China as an example, we argue that the post-Cold War conclusion that state ownership is fundamentally inefficient is premature. The key issue is not state versus private ownership per se but, rather, how well aligned the incentives are within a given system. Some of the economic models we find in reform-era China are actually better aligned and perhaps as transparent as their counterparts in the market economies of the capitalist West. Finally, because China is not caught up on the categorical assumption that private firms are efficient while state-owned firms are inefficient, the country has been able to be an institutional innovator in the area of public-private partnerships, leading to radical new corporate forms. [ABSTRACT FROM AUTHOR]

The article explores the transformation of state-owned enterprises (SOEs) into asset management companies in China. It provides an analysis on the impact of institutional investment on the productivity and life experiences of the employees working on asset management companies through the utilization of quantitative data. A case study on the impact of the restructuring to China National Petroleum Corp. (CNPC) and PetroChina Co. Ltd. is also given. It was found that state-owned asset management companies (SOAMCs) showed enhanced performance compared to traditional state offices.

In his pioneering research on corporate-community ties in Minneapolis-St. Paul, Galaskiewicz (1985a) examined the social conditions that guided corporate philanthropy in a given metropolitan area. Two conditions, however, suggest the need for revisiting the type of research taken on in that original study. First, Galaskiewicz's study lacked a comparative dimension for examining the institutional environments that drive variation across localities. Second, a great deal has changed in the institutional conditions that drive corporate ties to their communities since the 1980s and early 1990s, the most important institutional change coming from the Tax Reform Act of 1986 . We identify two significant factors that contribute to variation in local philanthropic commitments of corporations to the metropolitan communities in which they are headquartered. First, local corporate tax rates increase corporate giving overall, but they drive down corporate commitments to their localities. Second, the local state's involvement in the Low-Income Housing Tax Credit (LIHTC) program of 1986 also drives down local corporate giving. Thus, activist states that are successful in capturing the fiscal resources of corporations through a variety of institutional mechanisms end up driving down the philanthropic commitments of the corporations that are headquartered in those localities. We illuminate these relationships through in-depth qualitative research in three case cities and data on a nationally representative sample of 2,776 corporations. [ABSTRACT FROM AUTHOR]

Over the two and a half decades of economic reform in China, two types of Chinese firms have consistently outperformed their peers. In the 1980s, it was the firms at the lower levels of the industrial hierarchy, the township and village enterprises that were closely monitored by local governments. In the 1990s and beyond, the top performers have been those Chinese firms that have formal relationships with foreign investors. While many studies on the economic reforms in China have focused on the hardening of budget constraints and the transfer of technology from foreign to Chinese firms, I focus here on the stability created by relationships with local government offices and with powerful foreign investors. Where advocates of shock therapy have argued that a rapid transition to market institutions was the best path to building a market economy, I argue that the successful practices of the market are learned gradually over time, and the Chinese firms that are stabilized by attention from local government offices and relationships with foreign investors are well-positioned to successfully navigate China's emerging markets. A quantitative analysis of 81 firms in industrial Shanghai and three case studies help illuminate the mechanisms behind these relationships. [ABSTRACT FROM AUTHOR]

The article examines the process behind the emergence of the Low- Income Housing Tax Credit, a provision of the Tax Reform Act of 1986 in the U.S. While effectively channeling resources into inner city housing development, this policy shift created a windfall for corporations by allowing them a double tax break that individual citizens were explicitly denied in the country. This case is about the leveraging of corporate resources for the funding of a public good, however, this system only works with a radical giveback to the corporate community--a giveback that was denied to individuals. Within a few short years in the late 1980s, this new policy--and the industry that emerged around it--would become one of the key features of urban revitalization in the U.S., quickly gaining bipartisan support as it benefited multiple constituencies. Thus, this process is not only mid-1980s, a radical transformation took place in the provision of public housing in the U.S. A process of institutional selectivity then works to select systems that favor the powerful players and interest groups that are shaping legislation behind the scenes.

THE AGREEMENT late last year between the United States and China paving the way for China's entry into the World Trade Organization is a necessary and positive step toward continued [...]