Chinese Private Enterprises Research Articles

Strategic Entry and Determinants of Chinese Private Enterprises Into Africa

The authors discuss the strategic entry of Chinese private enterprises (PEs) into Africa by analyzing their characteristics of host distribution and overseas companies’ function and type. They find that Chinese PEs tend to invest in countries where Chinese investment has already concentrated, that more Chinese PEs engage in manufacturing and services than in agriculture and mining and quarrying, and that Chinese PEs take higher risks by choosing the type of subsidiary companies to enter Africa. They also make an empirical study of the determinants of Chinese PEs compared with state-owned enterprises in the period 2002–2011 and found Chinese PEs in Africa are driven mainly by the motivation of market-seeking, not by resource-seeking; China's imports from the host country also facilitate Chinese companies’ investment in Africa; and Chinese companies in Africa are risk-takers. At the end of the article, they study the case of Touchroad and verify the results of their empirical study.

Chinese Private Enterprises’ Management Innovation

Since the reform and opening, private enterprises of China have got a rapid development, and have done a great contribution to the continual development of national economy. However, with the change of external and internal situations, private enterprise management appears to be defective, sometimes it even does harm to the development of the enterprises. This reports aims to present of the problem of private enterprises in China. In order to solve this problem, Chinese private enterprises should accelerate the management innovation. We analyzed the necessities of enterprises’ management innovation, the motivation of management innovation, obstacles to management innovation. Finally, it puts forward the countermeasures to solve the problems.

Guanxi and evolving ownership structures in Chinese private enterprises

This paper develops a theoretical model to study features of the evolving ownership structures of private enterprises in Zhejiang Province, China. The model predicts that in a developing economy where the market environment is immature or unstable, the ownership structure of a typical private enterprise involves a cooperative arrangement between a party with management skills and another party with Guanxi (connections). As the market environment becomes more stable, the ownership share of the party with management skills increases. This result is confirmed by empirical evidence of 296 surveyed firms in Ningbo city of China, showing that the perceived importance of both government and family Guanxi declined with perceived improvements in market stability.

Private Enterprise Management Mode Selection Based on the Life Cycle Theory

Abstract Based on the life cycle of the enterprise, this paper discusses what Chinese private enterprise should do in choosing management mode. In every stage of the life cycle of enterprises, appropriate management should be adopted according to the characteristics of that state in order to improve the management efficiency of the private enterprise and promote the development of China’s private enterprises. Key words: Life cycle; Private enterprise; Management mode

The impact of network relationships on internationalization process: An empirical study of Chinese private enterprises

Chinese private enterprises have been internationalizing rapidly during the last two decades. This study adopts a network approach to examine what factors affect the internationalization process of Chinese private enterprises. Our survey of 108 private Chinese enterprises in the manufacturing sector in Zhejiang province in southeastern China revealed that business networks and personal networks affect the internationalization activities of Chinese private enterprises. Specifically, business networks have a positive impact on the timing of the first foreign market entry, the internationalization pace, and resource commitments, whereas personal networks have a positive impact on the internationalization pace and resource commitments, but not on the timing of the first foreign market entry. In this paper, we report our findings of our survey, discuss the contribution that this study makes to the existing internationalization literature, and suggest future research directions. Policy implications on how to facilitate the internationalization process are also discussed.

Who is importing forest products from Africa to China? An analysis of implications for initiatives to enhance legality and sustainability

Global forest product value chains are increasingly subject to regulatory requirements, such as legality and sustainability certification. For African forest products, a shift in the export destinations of forest products towards China, the leading timber product manufacturer, has raised concerns that social and environmental product and process standards are declining. Aggregate drivers of this shift have been documented, yet there has been little enterprise-level analysis of Chinese actors in African timber imports based in China. This paper provides an initial analysis, highlighting implications for existing and emerging regulatory initiatives. Data show that although an increasing number of Chinese private enterprises is engaged in African timber imports, import volumes remain concentrated among a small number of geographically clustered private and state-owned firms. Government-led schemes are beginning to address timber legality concerns. But given China’s growing domestic market for finished wood products, sustainability certification requirements driven by the US and EU will not be sufficient to ensure improved sourcing by Chinese firms.

Entrepreneurial leadership and context in Chinese firms: a tale of two Chinese private enterprises

We focus on entrepreneurial leadership styles and context in Chinese firms. Drawing on exploratory case study evidence from two Chinese high-tech private enterprises, we find that the interaction of multilevel factors (i.e. philosophical traditions and cultural values, organizational, personal and transitional factors) forms a complex and dynamic context of entrepreneurial leadership in Chinese firms. Benevolent leadership rooted in Confucianism is an overarching leadership style, whilst transactional and transformational leadership styles (which find parallel with Legalism and Daoism) are contingent upon a range of factors, especially the entrepreneurial leader's personal background and the firm's strategic focus and developmental stage.

Leverage, Political Risk and Cross-Border Acquisitions: Chinese SOEs vs. Private Enterprises

This paper aims to understand the internationalization of emerging market state-owned enterprises (SOEs) in contrast to private firms by examining cross-border acquisitions made by Chinese SOEs and...

Subnational Institutions and Internationalization of Emerging Market Firms:The Macro-Micro Link

Using survey data of 727 Chinese private enterprises in 31 provinces, we demonstrate that emerging market firms’ (EMFs) home-based subnational institutions, in terms of government’s market orientat...

The Impact of Legal Environment on the Growth of Chinese Private Enterprises

After three decades of development, China's private economy has made tremendous achievements. Due to historical and institutional reasons, compared to the state-controlled economy, the private econ...

Chinese Private Direct Investment and Overseas Chinese Network in Africa

AbstractBased on extensive interviews in China and in Africa over 2 years, the present paper investigates Chinese private direct investment in Africa. Drawing on the Swedish Uppsala model, we explore two mian issues. First, do Chinese private enterprises follow the linear mode to invest in Africa? Second, if not, how do they go out and develop their investments, and who helps them overcome the obstacles to investing in Africa? We find that very few Chinese private enterprises follow a linear internationalization process, and most depend on the local overseas Chinese network and other networks to facilitate their entry into the host market. The reason lies in that Chinese private enterprises are still at the early stage of internationalization. Entrepreneurship is one of the most important ownership advantages of Chinese private enterprises investing in Africa.

Female participation in TMT and firm performance: evidence from Chinese private enterprises

PurposeThis paper proposes an examination of the relationship between female participation in top management teams and firm performance in the emerging Chinese private economy. It aims to examine the direct link between female participation in top management teams and firm performance. This is examined in the context of human capital and social capital associated with female top executives to investigate the origins and the contingencies of the linkage.Design/methodology/approachDrawing on resource dependence theory, the study develops and tests a set of hypotheses regarding the key relationships, using the data of listed private‐owned companies in China's security exchanges in 2008, with critical information on financial performance, corporate governance structure and the top management team composition of the companies. Regression analyses are conducted to test the direct relationship and the moderating effects.FindingsThe empirical analysis supports a positive relationship between the degree of female participation and firm performance in Chinese privately owned companies. The positive relationship is further strengthened by female top executives' human capital and social capital, consistent with the hypotheses.Research limitations/implicationsThe present study gains consistent results with research conducted in the Western context, suggesting that the top management behavior of Chinese private enterprises is similar to that of their Western counterparts, possibly due to the fact that they are less influenced by direct governmental control and are more profit‐driven than state‐owned companies.Practical implicationsThe results of the study suggest that Chinese private companies can gain competitive advantages through identifying, attracting, and developing female managerial talents. And the female executives in the new era should be ones with systematic education and strong social connections. Both factors facilitate female executives to contribute better to their companies' performance.Originality/valueThe contribution of the present study is twofold. First, drawing on extant literature in the Western business context, the present study is the first to examine how female participation in top management influences firm performance in the context of the Chinese private sector, which contributes to the understanding of and offers insights to Chinese managerial practices. Second, the study enriches the extant literature by examining the moderating effects of female executives' human and social capitals.

Outward internationalization of private enterprises in China: The effect of competitive advantages and disadvantages compared to home market rivals

This study uses the resource-based view of a firm to examine the outward internationalization of private firms in China. We investigate the extent to which advantages/disadvantages of resource endowment and organizing capability of Chinese private enterprises (relative to both state-owned enterprises and foreign-invested enterprises at home) may drive outward internationalization and affect their risk-taking tendency when going international. Our analyses of 553 Chinese private enterprises show that a Chinese private firm's likelihood of venturing abroad is associated with resource endowment advantages vis-à-vis foreign-invested enterprises, organizing capability advantages vis-à-vis state-owned enterprises, and organizing capability disadvantages vis-à-vis foreign-invested enterprises. These same advantages (or disadvantages) in organizing capabilities also increase a firm's likelihood of choosing a high-risk entry mode. We also find that a firm's resource endowment and organizing capabilities interact with each other and mutually enhance each other's effect on the likelihood of outward internationalization.

The Last Golden Land?: Chinese Private Companies Go to Africa

SummaryA new dynamic presence is spreading rapidly and widely across Africa: that of Chinese private enterprises. For these firms, Africa is ‘the last golden land’ of economic opportunity. Based on the most extensive survey to date of Chinese private firms, business associations and government officials across China and sub‐Saharan Africa, this paper explores the critical questions of why these enterprises are investing in Africa? What are their perspectives on Africa's investment climate? The study shows a growing number of firms that contradict the stereotype of Chinese firms in Africa. Pushed by intense competition within China's domestic marketplace and pulled by the glint of new opportunities, many small, private manufacturing firms are heading to Africa quite independently of the Chinese government. They grasp this opportunity in a ‘three jump’ pattern. The first of these ‘three jumps’ are better known, from doing business within China to exporting to Africa; and then from exporting to Africa to investing in production in Africa. The third jump is less familiar: to investing in industry parks in Africa. Chinese firms cluster in new business parks, collaborating in coordinated production. Yet simultaneously, and contrary to popular perceptions, they are most concerned about the competition they face from other Chinese firms and not by competition from African or other expatriate firms in Africa. The Chinese business sector in Africa thus has growing ‘enclave’ characteristics: enterprises are located together in business parks, and simultaneously both competing with one another and cooperating and largely doing business with one another in the supply chain. They are relatively optimistic about the investment climate in Africa, especially those obstacles created by governments and public policy. However, Africa's prospects for successfully harnessing the Chinese private firms to its development goals lies in the way each is adapting to their growing understanding of each other.

Models of trust-sharing in Chinese private enterprises

This paper presents two related models of development patterns of Chinese private enterprises. They illustrate incentive-based reasons for ownership arrangements of private enterprises, and highlight how institutional foundations of trust, particularly government and family-based cultural values, play an important role in influencing the development of private enterprises. These models attempt to explain why government and family-based culture are crucial for the ownership structure and management of private enterprises. The main argument in the models is that the structure of family businesses can be viewed, in essence, as a form of trust-sharing ( Guanxi-sharing) arrangement within the firm. Furthermore, the increase in the prevalence of family businesses can be seen as a result of family trust replacing government trust in the firm's economic activities.

Regulatory Environment and Strategic Orientations in a Transitional Economy: A Study of Chinese Private Enterprise

This study examined characteristics of perceived political/regulatory environment and strategic orie ntations among Chinese private enterprises. Using a sample of fifty-three private entrepreneurs, the study found that regulatory hostility, dynamism and complexity led to strategies characterized by innovativeness, proactiveness, and risk-taking, yet discouraged future-oriented strategy. Results were compared with studies of entrepreneurs in western economies as well as Chinese entrepreneurs in other countries. Implications were also discussed.

Does Giving Lead to Getting? Evidence from Chinese Private Enterprises

Enterprise philanthropy is practiced in a very unique and rudimentary form in China. Based on a unique random survey data on 3837 Chinese private enterprises conducted in 31 provinces of China in 2006, I find the significant positive relationship between enterprise philanthropy donation and enterprise profitability, and the result supports the political and institutional power view of enterprise philanthropy in the latest development of China. Simply put, Chinese private enterprises carried out philanthropy activities to better protect property rights and nurture political connections, which in turn, leads to better enterprise profitability. The␣result is even stronger in institutions weaker provinces.

China's Private Enterprises in Africa and the Implications for African Development

This paper evaluates the growing presence of China’s private business sector in Africa. Currently, attention focuses on China’s state-owned enterprises in extractive industries. Less attention is paid to Chinese private enterprises. This study fills a knowledge-gap by evaluating characteristics and motivations of Chinese private firms in Africa, and assesses their development impacts. Key findings are that the Chinese private firms have followed their own paths to Africa, and the primary factors driving private investment are African market opportunities, competition within China and the presence of a strong entrepreneurial spirit. An effective mechanism bridging a gap between China’s African Policy and its implementation in terms of private sector engagement is lacking. To maximise development gains, a top-down and bottom-up ‘two-way street’ approach to Chinese public-private sector relations is necessary. This is a mutual learning process for the Chinese public and private sectors and also China-Africa relations. These are fluid relationships with each adapting to and shaping the other.

Government Policies and Private Enterprise Development in China: 2003–2006

AbstractThe relationship between government policy and economic development has been along‐standing topic of academic research and policy debate. The government of a transitional economy plays an important role in the process of economic development. Over the past three decades, the Chinese economy has been growing very rapidly, in particular because of the rapid development of the private sector. However, the performance of private enterprises is still affected by government policies. In the present paper, we examine the changes in large Chinese private enterprises' performance during 2003–2006 and test the determinants of such changes. We conclude that the Chinese Government's discriminating policies against private enterprises are the main cause of the private sector's downturn.

The relationship between political resources and diversification of private enterprises: An empirical study of the top 500 private enterprises in China

This paper argues that the political resources owned by Chinese private enterprises affect their diversification strategy under the context of China’s transitional economy. Based on the sample of top 500 private enterprises in 2004 in China, we find the following empirical evidence: First, political resources owned by private enterprises are positively and significantly related to their degree of diversification. Second, the possibility for private enterprises to diversify their business by entering industries under government regulation is positively related to their political resources. Third, the possibility of related diversification for private enterprise is negatively related to its political resources.