The essay of Dr Qin Zhong (STU Business School), Models of Trust-Sharing in Chinese Private Enterprises, was collected by the Economic Modelling (a SSCI journal) and is due to be published shortly.
Economic Modelling is recognized as a significant source of research papers concerning the development of economic models and essays for applied academic. The main objective of this well-known journal is to provide a platform upon which comments on theories in the development of economic models can be established. The vast amount of complex models published by the journal has provided tremendous referential support for policy analysis regarding high-end industrial economics. The journal also tries to keep readers updated with the models’ latest developments by following up with any amendments and revisions made. The main interested spheres covered by the journal include macroeconomic models in developed and developing countries, incremental models, optimization models, planning models, international trade models, as well as general equilibrium modeling, structural construction modeling, and sensitivity measurement models in macroeconomic policies.
China’s private sector has been developing rapidly since reform and open, while its contribution to national economy continues to grow. Development of private businesses, however, is remotely similar to traditional perceptions on property rights, particularly in the fledgling stage. In studying the development of China’s private industries, Dr Qin’s essay tries to inject cultural perceptions into traditional theories regarding property rights (including theories in proxy and internal production rights). Focusing on the situation where Red Hatted enterprises (claimed as state-run but in fact privately owned) are gradually replaced by authentic private firms, the concepts regarding connections and/or nepotism between authorities and private business owners were illustrated in the essay to establish 2 inter-related mathematical models in analyzing the changes occurred in the management of China’s private businesses.
The essay’s core argument was that the substance of family business can be perceived as an alternative form of property rights arrangement regarding internal sharing of connections in enterprise. Moreover, the management methods of family business are now adopted by more private firms. This is not merely caused by the ameliorated macroeconomic conditions, according to the essay, but also is a result of connections with officials being replaced by family relations in conducting business activities.
The essay has provided some insights and advices on the changing role of the government and the development of China’s private sector, which is characterized by family-business style management.
