Barbarians at the Gate of the Middle Kingdom: The International Mobility of Financing Contract and Governance

Entrepreneurship Theory and Practice, Forthcoming

52 Pages Posted: 18 Dec 2017

See all articles by Victor Zitian Chen

Victor Zitian Chen

University of North Carolina, Charlotte; University of North Carolina (UNC) at Charlotte - The Belk College of Business Administration

Sunny Li Sun

University of Massachusetts Lowell

Date Written: December 10, 2017

Abstract

Focusing on equity ratchet as a practice, we study how foreign private equity (PE) investors interacted with local agents in the process of legitimation and legalization of foreign financing contract and governance in the Chinese PE industry, while it was underdeveloped. Based on seven cases in China, we propose a three-stage micro-process model of international institutional entrepreneurship in an emerging field with high ambiguity: framing a motivational vision to promote a new practice; early adoption by local non-mainstream agents who gain legitimacy from diverse sources of institutional logic; and dominant mainstream adopters seeking legal protection to sustain their benefits. Our theory extends the emerging discussion on the transfer of corporate governance and institutional entrepreneurship across borders.

Keywords: international institutional entrepreneurship, financial contracting, governance, private equity, emerging markets

JEL Classification: K22, M16, M13, P34, P37

Suggested Citation

Chen, Victor Zitian and Sun, Sunny Li, Barbarians at the Gate of the Middle Kingdom: The International Mobility of Financing Contract and Governance (December 10, 2017). Entrepreneurship Theory and Practice, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3085594

Victor Zitian Chen (Contact Author)

University of North Carolina, Charlotte ( email )

The Belk College of Business
Charlotte, NC 28223

HOME PAGE: http://www.ChenZitian.com/

University of North Carolina (UNC) at Charlotte - The Belk College of Business Administration ( email )

The Belk College of Business
Charlotte, NC 28223

HOME PAGE: http://www.ChenZitian.com/

Sunny Li Sun

University of Massachusetts Lowell ( email )

72 University Ave.
Lowell, MA 01854
United States

HOME PAGE: http://https://scholar.google.com/citations?user=c-Covi4AAAAJ&hl

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