IDEAS home Printed from https://ideas.repec.org/a/cup/maorev/v1y2005i01p23-56_00.html
   My bibliography  Save this article

Market Transition and the Firm: Institutional Change and Income Inequality in Urban China

Author

Listed:
  • Nee, Victor
  • Cao, Yang

Abstract

This paper examines how the rise of a market economy in urban China redefines the rules governing economic activities and affects on earnings inequality. We identify three causal mechanisms linked to institutional change that are transforming the firm's employment practices: the higher marginal productivity of a private enterprise economy relative to state-owned enterprises, competition by firms for skilled and semi-skilled labor following emergence of labor markets and the end of state monopoly on labor allocation, and increased emphasis on merit-based reward systems in firms. Analyses of survey data from urban China show how these three causal mechanisms stemming from the transition to a market economy contribute to new patterns of earnings differentiation that increase income returns to human capital and private-sector entrepreneurship.

Suggested Citation

  • Nee, Victor & Cao, Yang, 2005. "Market Transition and the Firm: Institutional Change and Income Inequality in Urban China," Management and Organization Review, Cambridge University Press, vol. 1(1), pages 23-56, March.
    • Handle: RePEc:cup:maorev:v:1:y:2005:i:01:p:23-56_00
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S1740877600000966/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hu, Min & Dou, Junsheng & You, Xialei, 2023. "Is organizational ambidexterity always beneficial to family-managed SMEs? Evidence from China," Journal of Business Research, Elsevier, vol. 167(C).
    2. Ye Liu & Wei Xu & Jianfa Shen & Guixin Wang, 2017. "Market expansion, state intervention and wage differentials between economic sectors in urban China: A multilevel analysis," Urban Studies, Urban Studies Journal Limited, vol. 54(11), pages 2631-2651, August.
    3. Mike W. Peng & Sunny Li Sun & Lívia Markóczy, 2015. "Human Capital and CEO Compensation during Institutional Transitions," Journal of Management Studies, Wiley Blackwell, vol. 52(1), pages 117-147, January.
    4. Qing Cao & Eric Gedajlovic & Hongping Zhang, 2009. "Unpacking Organizational Ambidexterity: Dimensions, Contingencies, and Synergistic Effects," Organization Science, INFORMS, vol. 20(4), pages 781-796, August.
    5. Jaffe, Eugene Donald & Yi, Ling, 2007. "What are the drivers of channel length? Distribution reform in The People's Republic of China," International Business Review, Elsevier, vol. 16(4), pages 474-493, August.
    6. Jeoung Yul Lee & Vasyl Taras & Alfredo Jiménez & Byungchul Choi & Chinmay Pattnaik, 2020. "Ambidextrous Knowledge Sharing within R&D Teams and Multinational Enterprise Performance: The Moderating Effects of Cultural Distance in Uncertainty Avoidance," Management International Review, Springer, vol. 60(3), pages 387-425, June.
    7. Jianfeng Wu & Sali Li & Zijie Li, 2013. "The contingent value of CEO political connections: A study on IPO performance in China," Asia Pacific Journal of Management, Springer, vol. 30(4), pages 1087-1114, December.
    8. Qing Cao & Zeki Simsek & Hongping Zhang, 2010. "Modelling the Joint Impact of the CEO and the TMT on Organizational Ambidexterity," Journal of Management Studies, Wiley Blackwell, vol. 47(7), pages 1272-1296, November.
    9. Ramji Balakrishnan & Leslie Eldenburg & Ranjani Krishnan & Naomi Soderstrom, 2010. "The Influence of Institutional Constraints on Outsourcing," Journal of Accounting Research, Wiley Blackwell, vol. 48(4), pages 767-794, September.
    10. Mai, Nhat Chi, 2012. "FROM BUREAUPRENEUR TO HNWI: CHANGES AND EMERGENCE OF HIGH NET WORTH INDIVIDUALS (HNWIs) IN CHINA," OSF Preprints jhrqv, Center for Open Science.
    11. Yang Cao & Beth A. Rubin, 2014. "Market Transition and the Deinstitutionalization of Standard Work Hours in Post-Socialist China," ILR Review, Cornell University, ILR School, vol. 67(3), pages 864-890, July.
    12. Cheng, Zhiming, 2022. "Communist Party branch and labour rights: Evidence from Chinese entrepreneurs," China Economic Review, Elsevier, vol. 71(C).
    13. Shohei Nagasawa, 2018. "Asymmetric cost behavior in local public enterprises: exploring the public interest and striving for efficiency," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 29(3), pages 225-273, December.
    14. Anning Hu, 2014. "The Health Benefits of College Education in Urban China: Selection Bias and Heterogeneity," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 115(3), pages 1101-1121, February.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:maorev:v:1:y:2005:i:01:p:23-56_00. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kirk Stebbing (email available below). General contact details of provider: https://www.cambridge.org/mor .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.