Economic Development of China Dissertation Example | Topics and Well Written Essays - 11750 words

Economic Development of China - Dissertation ExampleNellis (1999) contends that the military posture of privatization in transitional economies depends on the existence of the institutional underpinnings of capitalism. In addition, empirical studies confirm the close relationship between good institutions and economic development (De pertinacious and Shleifer, 1993), Besley, 1995 Knack and Keefer, 1995 Easterly and Levine, 1997, 2003 Acemoglu, Johnson, and Robinson, 2001).On the other hand, Stiglitz (1999) suggests that using better commission contracts to make state-share holders act like private owners is a better choice in the absence of those institutional underpinnings, a path which has been followed by the Chinese government in the past two decades. As noted in World stick (1997) report, most other countries in transition have turned to systemic, widespread privatization of state owned enterprises (SOEs). In China, the state or its agents, carry out shareholder functions pe rformed by private owners in market economic systems. Retaining a large portion of state-owned shares in listed companies1, the Chinese government delegates different types of state-share holders to get word these state-owned shares. This thesis attempts to examine the government role of different types of state-share holders in Chinas listed companies.Chinas transition from a central-planned economy to a market-oriented one is special and unique. Chinese government creates its own path of transition or else than just using a blueprint or recipe from western advisors. Chinese government has been always attempting to privatize its state-owned assets gradually rather than a tumid bang like that undertaken by Russia... The interpretation of the results of this study is subject to four limitations. First, the classification of state-share holders based on their names is not good enough to cross off GA shareholders and incarnate state-share holders perfectly. For example, most stat e assets operating companies use the name of State Assets Operating gild, such as Jiangsu State Assets Operating Company. But some operating companies, which should be classified as GA shareholders, could use other names and then are classified as corporate state-share holders in this study.Second, corporate state-share holders could have more incentives and means to manage earnings to improve performance through related-party transactions than GA shareholders because they are holding companies (Jian (2003)). In this study, the potential earnings management through non-operating activities found in Chen and Yuan (2002), such as sales of fixed assets, has been controlled but the earnings management through related-party transactions cannot be controlled. This study also suggests several avenues for future research. While the benefit of corporate state-share holders has been documented in this study, the cost of them (such as insider control problems) cannot be ignored and remains an open question. More theoretical work is needed to understand the benefit and cost of different types of state-share holders. Another potential field of honor of research is to investigate their incentives to manage earnings for different types of state-share holders.