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The role of the state in resolving business disputes in China

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  • Du, Julan
  • Lu, Yi
  • Tao, Zhigang

Abstract

In this paper, we follow the theoretical framework proposed by Djankov et al. (2003) to investigate the role of the state in resolving business disputes and its impact on enterprise performance. Using a survey of private enterprises in China, we first construct an index to quantify the power of the state vis-à-vis the market in resolving business disputes, and then find that enterprises located in regions where the government has a greater relative power enjoy better performance. Our results suggest that the regulatory state has played a positive role in the economic transition in China.

Suggested Citation

  • Du, Julan & Lu, Yi & Tao, Zhigang, 2014. "The role of the state in resolving business disputes in China," Journal of Comparative Economics, Elsevier, vol. 42(4), pages 940-953.
    • Handle: RePEc:eee:jcecon:v:42:y:2014:i:4:p:940-953
    DOI: 10.1016/j.jce.2014.08.004
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    References listed on IDEAS

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    Cited by:

    1. Qun Bao & Yanling Wang & Hongjun Xie, 2019. "From Honeymoon To Divorce: Institution Quality And Foreign Investors' Ownership Consolidation In China," Economic Inquiry, Western Economic Association International, vol. 57(1), pages 372-390, January.
    2. Tong Fu & Ze Jian & Youwei Li, 2023. "How state ownership affects corporate R&D: An inverted‐U‐shaped relationship," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(3), pages 3183-3197, July.
    3. Amin, Mohammad & Djankov, Simeon, 2014. "Democratic institutions and regulatory reforms," Journal of Comparative Economics, Elsevier, vol. 42(4), pages 839-854.
    4. Du, Julan & Lu, Yi & Tao, Zhigang, 2015. "Government expropriation and Chinese-style firm diversification," Journal of Comparative Economics, Elsevier, vol. 43(1), pages 155-169.

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    More about this item

    Keywords

    Dispute resolution; Power of the state; Enterprise performance; Regulatory state;
    All these keywords.

    JEL classification:

    • P30 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - General
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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