Hostname: page-component-78c5997874-m6dg7 Total loading time: 0 Render date: 2024-11-19T22:06:30.328Z Has data issue: false hasContentIssue false
  • English
  • Français

Beyond Local Protectionism: China's State–Business Relations in the Last Two Decades

Published online by Cambridge University Press:  12 April 2016

Yuhua Wang
Yuhua Wang*
Affiliation:
Harvard University. Email: [email protected].
Get access Rights & Permissions [Opens in a new window]

Abstract

This article presents a large-scale, systematic study of politically connected firms in China. It was conducted by compiling a database of all the publicly traded firms in China in 1993, 2002 and 2012 that codes the biographies of hundreds of thousands of board members. I find that there has been a significant increase in the percentage of firms that are connected with the national government in the last 20 years. This casts doubt on a popular argument that businesses in China have primarily relied on “local protectionism.” I interpret this as a result of firms' need to connect with powerful and stable institutions. I test this by examining the impact of the fall of Chen Liangyu on firms in Shanghai.

摘要

本文通过中国上市公司 1993, 2002 和 2012 年全部董事会成员简历的数据考察当代中国政企关系的变化。我发现, 在过去的 20 年中, 与中央政府有关联的企业比例显著增加。这一结果有悖于中国企业主要依靠 “地方保护主义” 的流行说法。我认为这一趋势反应了企业与强势和稳定的政治机构建立关联的需要。对陈良宇撤职后上海上市公司的事件分析对这一看法提供了证据。

Keywords

local protectionismChinapolitical connectionscentral–local relationsevent studycorruption地方保护主义政治关联中央与地方关系事件分析腐败
Type
Articles
Information
The China Quarterly , Volume 226 , June 2016 , pp. 319 - 341
Check for updates
Copyright
Copyright © The China Quarterly 2016 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Acemoglu, Daron, Johnson, Simon, Kermani, Amir, Kwak, Todd and Mitton, James. Forthcoming. “The value of connections in turbulent times: evidence from the United States.” Journal of Financial Economics.Google Scholar
Agrawal, Anup, and Knoeber, Charles R.. 2001. “Do some outside directors play a political role?” Journal of Law & Economics 44, 179–198.CrossRefGoogle Scholar
Ang, Yuen Yuen. Forthcoming. “Co-optation & clientelism: nested distributive politics in China's single-party dictatorship.” Studies in Comparative International Development.Google Scholar
Ang, Yuen Yuen. 2012. “Counting cadres: a comparative view of the size of China's public employment.” The China Quarterly 211, 676–696.CrossRefGoogle Scholar
Barboza, David. 2012. “Billions in hidden riches for family of Chinese leader,” Nytimes.com, 25 October, http://alturl.com/wusdk. Accessed 6 August 6 2013.Google Scholar
Bernhard, William, and Leblang, David. 2006. Democratic Processes and Financial Markets: Pricing Politics. New York: Cambridge University Press.Google Scholar
Boubakri, Narjess, Cosset, Jean-Claude and Saffar, Walid. 2008. “Political connections of newly privatized firms.” Journal of Corporate Finance 14(5), 654–673.Google Scholar
Burns, John P. 1989. The Chinese Communist Party's Nomenklatura System: A Documentary Study of Party Control of Leadership Selection, 1979–1984. Armonk, NY: M.E. Sharpe.Google Scholar
Burns, John P. 1994. “Strengthening CCP control of leadership selection: the 1990 nomenklatura .” The China Quarterly 138, 458–491.Google Scholar
Dickson, Bruce J. 2003. Red Capitalists in China: The Party, Private Entrepreneurs, and Prospects for Political Change. New York: Cambridge University Press.Google Scholar
Dixit, Avinash K., and Pindyck, Robert S.. 1994. Investment Under Uncertainty. Princeton, NJ: Princeton University Press.Google Scholar
Eggers, Andrew C., and Hainmueller, Jens. 2009. “MPs for sale? Returns to office in postwar British politics.” American Political Science Review 103(4), 513–533.Google Scholar
Evans, Peter. 1995. Embedded Autonomy: States and Industrial Transformation. Princeton, NJ: Princeton University Press.CrossRefGoogle Scholar
Faccio, Mara. 2006. “Politically connected firms.” American Economic Review 96(1), 369–386.Google Scholar
Ferguson, Thomas, and Voth, Hans-Joachim. 2008. “Betting on Hitler – the value of political connections in Nazi Germany.” The Quarterly Journal of Economics 123(1), 101–137.Google Scholar
Fisman, Raymond. 2001. “Estimating the value of political connections.” American Economic Review 91(4), 1095–1102.Google Scholar
Fortune.com. 2014. “Fortune 500 2014,” http://alturl.com/ft3t6. Accessed 1 August 2015.Google Scholar
Gandhi, Jennifer, and Przeworski, Adam. 2007. “Dictatorial institutions and the survival of autocrats.” Comparative Political Studies 40, 1279–1301.Google Scholar
Geddes, Barbara. 1999. “What do we know about democratization after twenty years?” Annual Review of Political Science 2(1), 115–144.CrossRefGoogle Scholar
Gehlbach, Scott, and Keefer, Philip. 2011. “Investment without democracy: ruling-party institutionalization and credible commitment in autocracies.” Journal of Comparative Economics 39(2), 123–139.Google Scholar
Gov.cn. 2004. “Guowuyuan guanyu touzi tizhi gaige de jueding” (State Council's decision on reforming investment regulations), http://www.gov.cn/gongbao/content/2004/content_62883.htm. Accessed 1 August 2013.Google Scholar
Groseclose, Tim, and Snyder, James M.. 1996. “Buying supermajorities.” American Political Science Review 90(2), 303–315.CrossRefGoogle Scholar
Guthrie, Douglas. 1998. “The declining significance of guanxi in China's economic transition.” The China Quarterly 154, 254–282.CrossRefGoogle Scholar
Hellman, Joel S., Jones, Geraint and Kaufmann, Daniel. 2003. “Seize the state, seize the day: state capture and influence in transition economies.” Journal of Comparative Economics 31(4), 751–773.Google Scholar
Henisz, Witold. 2000. “The institutional environment for economic growth.” Economics and Politics 12(1), 1–31.CrossRefGoogle Scholar
Hsueh, Roselyn. 2011. China's Regulatory State: A New Strategy for Globalization. New York: Cornell University Press.Google Scholar
Huang, Yasheng. 1995. “Administrative monitoring in China.” The China Quarterly 143, 828–844.Google Scholar
Huang, Yasheng. 2002. “Managing Chinese bureaucrats: an institutional economics perspective.” Political Studies 50(1), 61–79.CrossRefGoogle Scholar
Jayachandran, Seema. 2006. “The Jeffords effect.” Journal of Law & Economics 49(2), 397–425.Google Scholar
Johnson, Chalmers. 1982. MITI and the Japanese Miracle: The Growth of Industrial Policy, 1925–1975. Stanford, CA: Stanford University Press.CrossRefGoogle Scholar
Johnson, Simon, Kaufmann, Daniel, McMillan, John and Woodruff, Christopher. 2000. “Why do firms hide? Bribes and unofficial activity after communism.” Journal of Public Economics 76(3), 495–520.CrossRefGoogle Scholar
Johnson, Simon, and Mitton, Todd. 2003. “Cronyism and capital controls: evidence from Malaysia.” Journal of Financial Economics 67(2), 351–382.Google Scholar
Kahn, Joseph. 2006. “Shanghai party boss held for corruption,” Nytimes.com, 25 September, http://alturl.com/bpnzf. Accessed 18 April 2014.Google Scholar
Kung, James, and Chen, Shuo. 2011. “The tragedy of the nomenklatura: career incentives and political radicalism during China's Great Leap famine.” American Political Science Review 105(1), 27–45.CrossRefGoogle Scholar
Landry, Pierre. 2008. Decentralized Authoritarianism in China: The Communist Party's Control of Elites in the Post-Mao Era. New York: Cambridge University Press.Google Scholar
Li, Lianjiang. 2004. “Political trust in rural China.” Modern China 30(2), 228–258.CrossRefGoogle Scholar
MacKinlay, A. Craig. 1997. “Event studies in economics and finance.” Journal of Economic Literature 35(1), 13–39.Google Scholar
Malesky, Edmund J., and Taussig, Markus. 2009. “Where is credit due? Legal institutions, connections, and the efficiency of bank lending in Vietnam.” Journal of Law, Economics, and Organization 25(2), 535–578.CrossRefGoogle Scholar
Manion, Melanie. 1993. Retirement of Revolutionaries in China: Public Policies, Social Norms, Private Interests. Princeton, NJ: Princeton University Press.Google Scholar
Montinola, Gabriella, Qian, Yingyi and Weingast, Barry. 1995. “Federalism, Chinese style: the political basis for economic success.” World Politics 48(1), 50–81.CrossRefGoogle Scholar
Moulton, Brent R. 1990. “An illustration of a pitfall in estimating the effects of aggregate variables on micro units.” The Review of Economics and Statistics 72(2), 334–338.Google Scholar
Naughton, Barry. 2007. The Chinese Economy: Transitions and Growth. Cambridge, MA: The MIT Press.Google Scholar
Oi, Jean C. 1992. “Fiscal reform and the economic foundations of local state corporatism in China.” World Politics 45(1), 99–126.Google Scholar
Riker, William H. 1962. The Theory of Political Coalitions. New Haven, CT: Yale University Press.Google Scholar
Roberts, Brian E. 1990. “A dead senator tells no lies: seniority and the distribution of federal benefits.” American Journal of Political Science 34(1), 31–58.Google Scholar
Sheng, Yumin. 2007. “Global market integration and central political control: foreign trade and intergovernmental relations in China.” Comparative Political Studies 40(4), 405–434.CrossRefGoogle Scholar
Shih, Victor, Adolph, Christopher and Liu, Mingxing. 2012. “Getting ahead in the Communist Party: explaining the advancement of central committee members in China.” American Political Science Review 106(1), 166–187.CrossRefGoogle Scholar
Shirk, Susan L. 1993. The Political Logic of Economic Reform in China. Berkeley, CA: University of California Press.Google Scholar
Shleifer, Andrei, and Vishny, Robert W.. 1993. “Corruption.” The Quarterly Journal of Economics 108(3), 599–617.Google Scholar
Steinfeld, Edward S. 2000. Forging Reform in China: The Fate of State-owned Industry. Cambridge: Cambridge University Press.Google Scholar
Sun, Pei, Xu, Haoping and Zhou, Jian. 2011. “The value of local political capital in transition China.” Economics Letters 110(3), 189–192.CrossRefGoogle Scholar
Svolik, Milan W. 2012. The Politics of Authoritarian Rule. New York: Cambridge University Press.Google Scholar
Treisman, Daniel. 2007. The Architecture of Government: Rethinking Political Decentralization. New York: Cambridge University Press.CrossRefGoogle Scholar
Truex, Rory. 2014. “The returns to office in a ‘rubber stamp’ parliament.” American Political Science Review 108(2), 1–17.Google Scholar
Tsai, Kellee S. 2006. “Adaptive informal institutions and endogenous institutional change in China.” World Politics 59, 116–141.Google Scholar
Wang, Yuhua. 2014. “Betting on a princeling.” Paper presented at the Midwest Political Science Association Annual Meeting, Chicago, IL, 4 April 2014.Google Scholar
Wang, Yuhua. 2015. Tying the Autocrat's Hands: The Rise of the Rule of Law in China. New York: Cambridge University Press.Google Scholar
Wank, David L. 1999. Commodifying Communism: Business, Trust, and Politics in a Chinese City. Cambridge: Cambridge University Press.Google Scholar
Wedeman, Andrew Hall. 2003. From Mao to Market: Rent Seeking, Local Protectionism, and Marketization in China. Cambridge: Cambridge University Press.Google Scholar
Wedeman, Andrew Hall. 2012. Double Paradox: Rapid Growth and Rising Corruption in China. Ithaca, NY: Cornell University Press.Google Scholar
Wong, Christine P.W. 2000. “Central–local relations revisited: the 1994 tax-sharing reform and public expenditure management in China.” China Perspectives 31, 52–63.Google Scholar
Yang, Dali L. 2006. “Economic transformation and its political discontents in China: authoritarianism, unequal growth, and the dilemmas of political development.” Annual Review of Political Science 9, 143–164.Google Scholar