Market Governance and Firm Performance Under China's State Capitalism

Management and Organization Review, 11(4): 711-713, December 2015

4 Pages Posted: 28 Feb 2016

See all articles by Douglas B. Fuller

Douglas B. Fuller

City University of Hong Kong (CityU)

Victor Shih

University of California, San Diego (UCSD), School of Global Policy & Strategy, 21st Century China Center

Ran Tao

Renmin University of China

Date Written: December 1, 2015

Abstract

In this paper we investigate the introduction of an export tax on steam coal levied by an individual country (Australia), or a group of major exporting countries. The policy motivation would be twofold: generating tax revenues against the background of improved terms-of-trade, while CO2 emissions are reduced. We construct and numerically apply a two-level game consisting of an optimal policy problem at the upper level, and an equilibrium model of the international steam coal market (based on COALMOD-World) at the lower level. We find that a unilaterally introduced Australian export tax on steam coal has little impact on global emissions and may be welfare reducing. On the contrary, a tax jointly levied by a "climate coalition" of major coal exporters may well leave these better off while significantly reducing global CO2 emissions from steam coal by up to 200 Mt CO2 per year. Comparable production-based tax scenarios consistently yield higher tax revenues but may be hard to implement against the opposition of disproportionally affected local stakeholders depending on low domestic coal prices.

Keywords: China, management, property rights, capitalism, state

JEL Classification: L20

Suggested Citation

Fuller, Douglas B. and Shih, Victor and Tao, Ran, Market Governance and Firm Performance Under China's State Capitalism (December 1, 2015). Management and Organization Review, 11(4): 711-713, December 2015, Available at SSRN: https://ssrn.com/abstract=2738347

Douglas B. Fuller (Contact Author)

City University of Hong Kong (CityU) ( email )

83 Tat Chee Avenue
Kowloon
Hong Kong

Victor Shih

University of California, San Diego (UCSD), School of Global Policy & Strategy, 21st Century China Center ( email )

9500 Gilman Drive #0519
La Jolla, CA 92093-0519
United States

Ran Tao

Renmin University of China ( email )

Room B906
Xianjin Building
Beijing, Beijing 100872
China

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