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The Evolution of International Hybrid Enterprises in China

Victor Zitian Chen

University of North Carolina, Charlotte; Columbia University

September 26, 2011

A large number of multinational enterprises have formed equity joint ventures with a Chinese government agent or a Chinese state-owned enterprise as their entry strategy into the dynamic Chinese market. These state-private equity joint ventures, which are usually called hybrid enterprises, are widely believed to be the best business model in countries like China, where the economy is hybrid, too, with an extensively liberalized market economy operating within an autocratic political and legal system. So far, these hybrid enterprises, which meld government support with private sector efficiency, have generally outperformed wholly state-owned or wholly private counterparts. However, the pressures on Beijing to maintain economic performance -- rather than any concerns for greater political freedom -- will likely lead to progressive liberalization of China’s legal system and greater openness in decision making. As this occurs, the advantages of the hybrid business model will inevitably fade.

Number of Pages in PDF File: 18

Keywords: hybrid enterprise, hybrid ownership, joint venture, China

JEL Classification: F21, F23, L1, P2, P3

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Date posted: September 27, 2011 ; Last revised: May 22, 2012

Suggested Citation

Chen, Victor Zitian, The Evolution of International Hybrid Enterprises in China (September 26, 2011). Available at SSRN: http://ssrn.com/abstract=1933978 or http://dx.doi.org/10.2139/ssrn.1933978

Contact Information

Victor Zitian Chen (Contact Author)
University of North Carolina, Charlotte ( email )
The Belk College of Business
HOME PAGE: http://www.VictorZChen.com/
Columbia University
Vale Columbia Center on Sustainable Int Investment
Columbia Law School - The Earth Institute
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