The Chinese business system and its authoriliberal economic model

China's position as one of the most powerful nations in the world is undisputed. However, in an evolving landscape, China's utilization of a path-dependent business system may hinder the ability of the country's institutions to undergo necessary change, which will have important implications for international business literature. Through business system theory, empirical evidence, and a mixed methods approach, we discuss China's business system explaining how the system may impair sustainable growth and the transformation required by a less dependent industrial society. Our research suggests that the Chinese business system is still very arrested due to its recent past, and the Chinese Communist Party has only partial interest in improving some of the most important bases for the development of modern enterprises, even if fostering a somewhat liberal economic approach. Since similar political (authoritarian) and economic (liberal) approaches are found elsewhere, we theorize on what we called an authoriliberal economic approach.     

国外典型科技创新中心评价指标体系对比研究

国际科技创新中心作为原始创新策源地,是全球创新版图的重要组成部分,也是推进创新型国家建设的重要平台。按照国际科技创新中心的发展定位和目标,对其创新能力进行评估是科技创新中心可持续发展的重要基础,也可以为其他科技创新中心建设提供有益借鉴。本文首先梳理了国际科技创新中心的概念、内涵和我国国际科技创新中心建设发展的脉络,然后对比分析国外典型科技创新中心评价指标体系,在此基础上,为我国国际科技创新中心建设提出相关建议。     

Transformation of China's energy sector: trends and challenges

The conclusions presented here sum up the contributions in the Special Issue regarding the managing of China's energy sector, particularly regarding the demand and profile of energy as well as the marketization of the sector. Strategic, organizational and policy issues relevant to the main theme are set out. Both demand and supply scenarios for the nation's energy are seen as in flux, as the economy slackens and dependence on imports rises. Unprecedented levels of urban environmental pollution and steady growth of energy consumption in the wake of a rising living standard have brought the issue to headline-prominence as never before. China's rapidly increasing renewable energy will not change its heavy reliance on coal and a lesser extent oil in the coming decade. After decades of transformation, China's energy sector now operates in a domestic market characterized by strong governmental influence and monopolistic state firms. Abroad, China's firms are exposed to heavier market pressure and competition. While the state's policies have succeeded in ensuring energy supplies and propelling China's renewable energy manufacturers into global prominence and opening up domestic market, much room for improvement exists in the competitiveness of the domestic market and domestic energy firms, transparency of pricing and the effectiveness of regulation.     

Cottage and Small Firm "Presence" in Indonesian Manufacturing between 1975–1996

The article reviews the development of business incubators in a developing country, namely Nigeria.The current operational status of the seven existing incubators are highlighted as well as the successes and shortcomings associated with the implementation of the programme. This is followed with an assessment of the needs to be addressed before incubators can make the desired impact in stimulating entrepreneurship development and technological innovation. Finally, policy recommendations are made to guide the future development of business incubators in Nigeria so that they can make effective contribution to the goal of promoting small and medium scale enterprises.     

我国专业化创业服务体系的研究与思考

创新驱动正成为我国经济高质量发展的关键，创业服务平台作为我国中小微企业创新创业的重要载体，服务模式和服务质量对助力创新经济具有重要意义。通过梳理国内众创空间、大学科技园、科技企业孵化器等多层面的创业服务平台运营现状，分析创业服务体系对科技创新和产业发展的显著作用，提出专业化服务能力建设对于推动战略性新兴产业的快速发展，支撑我国产业创新发展和“双创”升级具有重要价值并提出相应的推进策略。     

Rationale of internationalization of China's national oil companies: seeking natural resources,strategic assets or sectoral specialization?

The bulk of the existing literature emphasized that China's companies sought strategic assets (technology, brands and access to markets) through internationalization in order to overcome latecomers' comparative disadvantage, while some studies suggested that these firms went after natural resources to address China's rising oil imports. The third argument (which we coin the ‘sectoral strength’ hypothesis) suggested that the upstream firms in extractive business would seek natural resources, whereas downstream ones would seek strategic assets. In this study, we examine the rationale of main overseas investment deals (‘going out’) of China's two largest national oil companies during 2002–2010 which were also China's top two non-financial firms with the largest outward investment stocks during 2004–2010. We conclude that these deals can be best explained by the ‘sectoral specialisation’ hypothesis supplemented with a consideration for strategic assets.     

The Business(es) of the Chinese State

The state industrial sector is the Achilles heel of China's otherwise remarkable economic performance over the past two decades. Most other countries in transition from socialism have transformed SOEs into commercial entities through systematic, market‐driven restructuring and privatisation to become more efficient and competitive. In China, a series of innovative, if often administrative, insitutional reforms since 1978 have begun to achieve the Chinese authorities' goal of ‘separating governemtn from business.’ But the Chinese State still maintains ownership of key enterprises, and government agencies carry out shareholder functions typically performed by private owners in a market economy. Although privatisation and restructuring of SOEs is occurring, it mostly pertains to small and medium sized firms. For the principal businesses, by contrast, the creation of large state enterprise groups and holding companies (and experiments in other forms of ‘state asset management’) have become the main form of restructuring. Today, China's SOEs still account for more than one‐quarter of national production, two‐thirds of total assets, more than half of urban employment and almost three‐quarters of investment. While direct budgetary subsidies have declined, explicit and implicit subsidies are still making their way to prop up loss‐making SOEs through the financial system and other routes. At the same time, SOEs are still producing non‐marketable products, resulting in a sizeable inventory overhang. These inefficiencies and distortions represent a drain on the country's resources and thus present a challenge to the Chinese leadership for reform. This paper sheds light on these challenges by analysing the incentives and constraints on China's SOE reform programme. Four critical aspects of the reforms are highlighted and evaluated against the backdrop of international experience: clarification of property rights; establishment of large group/holding companies and other new organisational structures; improved corporate governance incentives; and implementation of international financial accounting and auditing practices. The paper concludes with policy recommendations.     

International strategies of mid-sized firms: A comparison of Indiana and Guangdong Province

A China strategy is becoming more important for a growing number of mid-sized companies as they observe China's increasingly greater impact on the U.S. economy. Our study surveyed Indiana and Guangdong firms to assess their interest in future international engagement in the other's country. Our results confirm current engagement by mid-sized firms from both countries in some activities with the other country, but there is a strong interest in doing more. Hence, there are opportunities for many Indiana organizations to play a role in assisting Indiana firms in developing international expertise, business development, and knowledge of China. In the study, 97 firms from the Guangdong Province and 105 Indiana firms identified their current international activities as well their future intentions relative to business development in the other's country.     

Whither Foreign R&D in China: Some Concluding Thoughts on Chinese Innovation

The purpose of this article is to highlight the impact of a new range of field-work driven scholarly research regarding foreign R&D in China on the field of Chinese innovation studies. The field of China innovation studies is positioned for a major take-off with the opening up and broadening of the field to a new generation of scholars and experts, including the growing participation and contributions of Chinese nationals from the People's Republic of China (PRC). With the continued opening of China to the outside world has come also increased scholarly access which is allowing for research on issues that heretofore was constrained due to the limited availability of information as well as political and national security sensitivities. The field also is benefiting from the increased visibility being given to innovation matters by the Chinese government and the rise in the number of foreign R&D centres that have been established by foreign companies. New ‘internally-focused’ questions related to R&D spending, the cultural and historical setting for innovation, and the institutional structure are being addressed with some promising results. In addition, a whole new series of ‘externally-focused’ questions also are beginning to dominate the research agenda as more and more foreign firms seek to take advantage of China's improved climate for overseas business as well as the growing number of scientists and engineers at the higher end of the Chinese talent pool. The more we seem to find out, however, the more we realize we need to know to truly understand China's technological potential. That said, it is increasingly clear that foreign influence is having an important shaping effect on the nature of the PRC's R&D system, especially with respect to the strategic role played or potentially being played by returned scholars and experts whose more cosmopolitan perspectives serve as a real asset in building bridges between Chinese traditional attitudes and modes of behaviour towards new knowledge creation and the current institutional constraints on China's innovation trajectory since 1949.     

IMC in an emerging economy: the Chinese perspective

Integrated marketing communications (IMC) planning and implementation vary greatly by market and country. This study, based on the survey data compiled from 135 Chinese marketing executives, focuses on IMC in China's emerging economy, with the goal of providing an outlook of IMC's current development in China while uncovering factors in the country's socioeconomic and business infrastructures that may cause IMC to deviate from the traditional Western model. The study also explores Chinese responses to the rising proliferation of digital media and its implications for IMC development.

The study concludes that despite uneven business development and a current lack of training in IMC-related skills, IMC appears to be the inevitable course or the future of Chinese marketing communications. Due to factors unique to the Chinese business landscape, such as government-owned business structures, political nuances in marketing channel relationships, and uneven development of consumer culture, IMC in China will likely evolve differently than in the US. Survey respondents reveal that IMC is progressing much faster in local, privately owned firms than in their state-owned counterparts. The rise of digital media will also disrupt traditional media outlets, providing challenges to the Chinese marketer.     

Does ownership type matter for innovation? Evidence from China

According to the institution-based view, ownership type is a key variable affecting environment-strategy configurations. This study configures the mechanism in which ownership types (as an institutional factor) moderate the effect of innovation strategies on firms' innovation performance. An empirical analysis was conducted on Chinese hi-tech manufacturing firms, using information related to the innovation activities of 303 firms. The empirical results suggest that ownership type affects the positive relationship between three sources of innovation (internal R&D activities, partnering with alliance partners, and partnering with universities) and innovation performance, as well as the negative relationship between external contracting and innovation performance (product or process innovation). The results imply that organizations doing business in China must be aware of the business environment that they intend to enter, especially if the intention is to develop new products or innovate current business processes.     

Country‐of‐Origin and Social Resistance in Host Countries: The Case of a Chinese Firm

While China's outward direct investments continue to soar, many Chinese firms reportedly face social resistance in host countries during the internationalization process. We explore this phenomenon from a country‐of‐origin (COO) perspective using Fiske and colleagues’ (Fiske, Cuddy, Glick, & Xu, 2002; Fiske, Xu, Cuddy, & Glick, 1999) stereotype content model. Our findings from a recent case in New Zealand show that China's COO emerges as a key variable influencing how local actors view Chinese investors. Specifically, despite China's significant economic and social developments over the past decades, it suffers from a somewhat negative country image in two stereotype dimensions: competence and warmth. This leads to a perception by local actors that Chinese firms are of low quality, which explains the source of resistance in society. To address such a liability of origin, Chinese firms must learn to deal with this form of stereotypical judgment encountered in a host environment. Further contributions and limitations of the study are discussed in the article. © 2016 Wiley Periodicals, Inc.     

Building Capable Organization via Technological Innovation: A Study of a China's Leading Textile Machinery Company

ABSTRACT

One of the most interesting structural adjustments from a centrally planned government to a market economy has taken place in China. When China's began preparation for entry into the World Trade Organization, the SOEs found themselves with little time to prepare for outside competition. The long-term influences of traditional centralized systems left companies in a state of redundancies, stagnation and operational obsolescence. Most lack flexibility in terms of structural change, were weak in technological innovation, had a large number of surplus employees, as well as inefficient production and business operations. This paper chronicles the transformation of one of China's largest leading textile machinery manufacturing companies, Jingwei Textile Machinery Company Ltd. (Jingwei) in its transformation from a relatively inefficient and ineffective SOE to competitive leader in the textile machinery manufacturing industry. In just one year (1998 to 1999), Jingwei realized an astounding 96.2 percent increase in sales. Much of the company's success is attributed to a commitment to technological advancements and the foresight of top management.     

Science parks and incubators: observations,synthesis and future research

Problems with the extant literature on science parks and incubators are examined in terms of four levels of analysis: the science parks and incubators themselves, the enterprises located upon science parks and incubators, the entrepreneurs and teams of entrepreneurs involved in these enterprises and at the systemic level. We suggest there is no systematic framework to understand science parks and incubators, that there is a failure to understand their dynamic nature as well as that of the companies located on them, that there is a lack of clarity regarding the performance of science parks and incubators which is associated with problems in identifying the nature of performance. We review briefly the papers contained in this special issue and demonstrate how each sheds light on an unexplored dimension of this emerging literature. In the concluding section, we synthesize the findings of the papers and outline a broader research agenda.     

Innovation patterns and their effects on firm performance

This study aims to identify various innovation patterns and understand their effects on firm performance across business service sectors. By collecting empirical data from 198 Korean business services firms, we explore these firms’ major innovation patterns, conceptualized as combinations of different service innovation dimensions: service concept, service delivery, customer interaction, and technology. Then, in accordance with the innovation patterns they display, we group these firms into four clusters: ‘service delivery-based high-technology', ‘service delivery and customer interaction-integrated', ‘customer interaction-based high-technology', and ‘strongly balanced’ innovators. Last, we investigate whether these patterns influence firm performance. Our findings are three-fold: (1) the innovation patterns in business service firms result from the creation of new combinations of major service innovation dimensions, (2) four independent innovation patterns emerge in business service firms, and (3) these patterns lead to different levels of firm performance. Practically, our findings highlight the importance of highly qualified employees, customer interaction, and technology in improving financial performance.     

Explaining National Differences in the Size and Industry Distribution Employment

What forces determine national differences in the size and industry distribution of employment? We stress the role of the economic policy environment as determined by business taxes, employment security laws, credit market regulations, the national pension system, wage-setting institutions and the size of the public sector. We characterize these aspects of the economic environment in Sweden prior to 1990–91 and compare them to the situation in other European countries and the United States. Our characterization and international comparisons show that Swedish policies and institutions strongly disfavored less capital-intensive firms, smaller firms, entry by new firms, and individual and family ownership of business.

We also compile evidence that these forces affect outcomes. Taking the U.S. industry distribution as a benchmark that reflects a comparatively neutral set of policies and institutions, Sweden's employment distribution in the mid-1980s is sharply tilted away from low-wage industries and industries with greater employment shares for smaller firms and establishments. Compared to other European countries, Sweden has an unusually high share of employment in large firms. Furthermore, the Swedish rate of self- employment in the 1970s and 1980s is the lowest among all OECD countries.

The institutional and policy factors emphasized by our study differ greatly across countries. This fact suggests that our approach can be fruitfully applied to other studies of national differences in industry and size structures and their evolution over time. As an example, the tax reform wave of the 1980s – which largely evened out cross-country differences in corporate taxation among OECD countries – offers some basis for projecting a movement towards greater similarity among wealthy countries in the size and industry distribution of employment.

     

Globalisation and Industrial Policy: The Case of China

After a quarter of a century of industrial policy, China's objective of nurturing a group of globally competitive state‐owned enterprises appears to have succeeded beyond most expectations. However, China's SOEs are far from catching up with the world's leading firms. Protection through state ownership in a massive, fast‐growing economy has permitted China's SOEs to earn large profits and achieve high market capitalisations, but this is not the same thing as building globally competitive firms. The fact that China's industrial policy has been unsuccessful after a quarter of a century of intense effort demonstrates how difficult it is to construct an industrial policy in the era of capitalist globalisation, which has produced intense global industrial concentration across large parts of the global value chain. Although the detailed content of the next stage of reform of China's large state‐owned enterprises is unclear, China's determination to build a group of globally competitive large companies remains undimmed.     

Managing China's energy sector: between the market and the state

As China has now become the largest energy consumer in the world, its energy sector has understandably huge domestic and global implications. In this Special Issue, which is an interdisciplinary one, comprising a set of eight in-depth empirical studies by leading international experts in the field, we set out to examine the management of the transformation of China's conventional and renewable energy sectors, with special attention to state–business relations and their link to the market.     

The globalization of Chinese enterprises

The question of how and why Chinese firms globalize is one of the most pressing issues for businesses today. China's globalization process is nothing less than remarkable. The twenty‐first century will feature a developing country as the leader of the global economy by 2020, when, by most estimates, China's purchasing power parity (PPP) gross domestic product (GDP) surpasses America's. With China's new role on the world's stage, global economic and political institutions are likely to change. China's foray into Latin America, for example, has changed the traditional role that America has played in its “backyard.” While the Chinese government was given much credit for China's globalization, Chinese private‐ and family‐owned businesses have also propelled China outward. Our research stream and annual China Goes Global conference at Harvard has attempted to frame the questions associated with China's globalization. This special issue is another important step in this direction. © 2012 Wiley Periodicals, Inc.     

Geographical FDI knowledge spillover and innovation of indigenous firms in China

In recent decades, theoretical debate on firm innovation has considered particular forms of spatial clustering and foreign direct investment as almost mutually exclusive drivers. While cluster literature pays less attention to firm heterogeneity in ownership structure, FDI literature ignores the importance of geographical dimension in spillover effects. This study combines these two lines of theoretical inquiry to investigate regional FDI knowledge spillover effects on product innovation of China's indigenous electronic firms. It is found that localized innovative-related activities of foreign-invested firms significantly facilitate product innovation of domestic firms. However, FDI horizontal spillover is more important than vertical spillover and cross-sector rather than intra-sector knowledge is significant for indigenous innovation. FDI spillover effects can be reinforced by local innovative activities of domestic firms. This study highlights the significance of geographical proximity and relatively heterogeneous knowledge in FDI spillover effects on domestic innovation but questions the mutual trust relationship between foreign and domestic firms in a cluster.