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Transition Trajectories for Market Structure and Firm Strategy in China

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  • Steven White
  • Xielin Liu

Abstract

Research in transition economies like China has sought and found explanations for strategic behaviour based on institutional and other social processes, leading to descriptions of China's emerging business system as ‘network capitalism’. This paper argues, however, that organizational capabilities and transaction costs are increasingly important influences on strategic choice as economic reforms proceed. An in‐depth case study of one firm's behaviour in two different asset markets – R&D and distribution in the Chinese pharmaceutical industry – illustrates fundamental differences in firm strategies for securing these assets. To account for this variety and move beyond the homogeneity implied by prior research, we propose a framework for differentiating the transition trajectories for different types of complementary assets. We propose conditions under which all three perspectives – institutional and social structure, organizational capabilities and transaction costs – predict similar trajectories and firm strategies, but different decision processes, and when their predictions differ.

Suggested Citation

  • Steven White & Xielin Liu, 2001. "Transition Trajectories for Market Structure and Firm Strategy in China," Journal of Management Studies, Wiley Blackwell, vol. 38(1), pages 103-124, January.
  • Handle: RePEc:bla:jomstd:v:38:y:2001:i:1:p:103-124
    DOI: 10.1111/1467-6486.00230
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    Cited by:

    1. Zhichang Zhu, 2018. "Institutional change and strategic choice: debating the ‘stage-model’ of strategy in emerging economies," Asia Pacific Business Review, Taylor & Francis Journals, vol. 24(3), pages 371-388, May.
    2. Miguel Pina e Cunha & Rita Campos e Cunha, 2002. "Writing new scripts: redefining managerial agency in Cuba," Nova SBE Working Paper Series wp408, Universidade Nova de Lisboa, Nova School of Business and Economics.
    3. White, Steven & Gao, Jian & Zhang, Wei, 2005. "Financing new ventures in China: System antecedents and institutionalization," Research Policy, Elsevier, vol. 34(6), pages 894-913, August.
    4. Diego Quer & Enrique Claver & Laura Rienda, 2007. "Business and management in China: A review of empirical research in leading international journals," Asia Pacific Journal of Management, Springer, vol. 24(3), pages 359-384, September.
    5. Pina e Cunha, Miguel & Campos e Cunha, Rita, 2003. "The interplay of planned and emergent change in Cuba," International Business Review, Elsevier, vol. 12(4), pages 445-459, August.

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