Framing China: Transformation and Institutional Change Through Co-Evolution

28 Pages Posted: 18 Feb 2008

See all articles by Barbara Krug

Barbara Krug

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM); Erasmus Research Institute of Management (ERIM)

H. Hendrischke

University of New South Wales (UNSW) - Faculty of Arts and Social Sciences

Abstract

This paper proposes a new institutional perspective to explain not only the diversity of local business systems in China but also how this diversity results from the integration of major institutional forces. We model the emergence of China's business systems as a co-evolutionary process unfolding along a business-government and a micro-macro-level dimension structured by intergovernmental institutional competition, business to business and business to government networking and public-private corporate governance. We find that: (i) China's emerging business system is the result of local institutional competition at the micro level that reduces the need for national (macro) institutions and impacts on the local implementation of national (including supranational) policies' (ii) the interaction between government and business is structured through networks which operate according to an economic rationale while drawing on cultural norms and traditions' and (iii) local businesses interact with local governments to recombine productive factors and reorganise firms and industries in line with local institutions. We conclude that the astonishing adaptability of Chinese businesses as well as the risk of corruption and lack of formal control at local government level are elements of locally differentiated business systems which are held together by an overarching institutional architecture.

Suggested Citation

Krug, Barbara and Hendrischke, Hans, Framing China: Transformation and Institutional Change Through Co-Evolution. Management and Organization Review, Vol. 4, Issue 1, pp. 81-108, March 2008. Available at SSRN: https://ssrn.com/abstract=1093066 or http://dx.doi.org/10.1111/j.1740-8784.2007.00092.x

Barbara Krug (Contact Author)

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Hans Hendrischke

University of New South Wales (UNSW) - Faculty of Arts and Social Sciences ( email )

Sydney
Australia
+61 2 9385 2187 (Phone)
+61 2 9385 1190 (Fax)

HOME PAGE: http://languages.arts.unsw.edu.au/staff/staff.php?first=Hans&last=Hendrischke

Register to save articles to
your library

Register

Paper statistics

Downloads
9
Abstract Views
695
PlumX Metrics