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Market Design in Chinese Market Places

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  • Krug, B.
  • Hendrischke, H.

Abstract

The Market Design (MD) approach to institutional analysis provides the analytical tools to evaluate endogenous institution building in local market places irrespective of the institutional setting of the national economy. Implicit in this analysis of endogenous institution building at the market place level is the recognition of institutional diversity, which none of the conventional forms of institutional analysis can provide. We extend the MD approach from its original game theory perspective to examine three market places in China: township and village enterprises, equity joint ventures and public utilities. We conclude that the MD approach (1) provides the analytical tools and criteria to evaluate whether or not market places are robust and sustainable, (2) links market behavior at the market place level, which is characterized by size, coordination and trust problems, with general level considerations based on transaction costs, and (3) suggests that functioning market places are achievable, even if the formal institutions of the general economy are weak or partially missing. Our research has policy implications and opens new avenues for research into the emergence of markets.

Suggested Citation

  • Krug, B. & Hendrischke, H., 2012. "Market Design in Chinese Market Places," ERIM Report Series Research in Management ERS-2012-021-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    • Handle: RePEc:ems:eureri:37959
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    Cited by:

    1. Michael Young & Terence Tsai & Xinran Wang & Shubo Liu & David Ahlstrom, 2014. "Strategy in emerging economies and the theory of the firm," Asia Pacific Journal of Management, Springer, vol. 31(2), pages 331-354, June.
    2. Jipeng Qi & Xiangfei Fu & Jie Li & Jigang Xie, 2020. "The co-evolution of institutions and stakeholders in creating new industries," Asia Pacific Journal of Management, Springer, vol. 37(4), pages 1085-1118, December.
    3. Yuan Li & Haowen Chen & Yi Liu & Mike Peng, 2014. "Managerial ties, organizational learning, and opportunity capture: A social capital perspective," Asia Pacific Journal of Management, Springer, vol. 31(1), pages 271-291, March.
    4. Tachia Chin & Sang-Bing Tsai & Kai Fang & Wenzhong Zhu & Dongjin Yang & Ren-huai Liu & Richard Ting Chang Tsuei, 2016. "EO-Performance relationships in Reverse Internationalization by Chinese Global Startup OEMs: Social Networks and Strategic Flexibility," PLOS ONE, Public Library of Science, vol. 11(9), pages 1-19, September.
    5. Yaqun Yi & Yuan Li & Michael A. Hitt & Yi Liu & Zelong Wei, 2016. "The influence of resource bundling on the speed of strategic change: Moderating effects of relational capital," Asia Pacific Journal of Management, Springer, vol. 33(2), pages 435-467, June.
    6. A. Ashwin & Rishikesha Krishnan & Rejie George, 2015. "Family firms in India: family involvement, innovation and agency and stewardship behaviors," Asia Pacific Journal of Management, Springer, vol. 32(4), pages 869-900, December.
    7. Ciprian Stan & Mike Peng & Garry Bruton, 2014. "Slack and the performance of state-owned enterprises," Asia Pacific Journal of Management, Springer, vol. 31(2), pages 473-495, June.
    8. Chenxi Zhou & Kent Ngan-Cheung Hui & Kevin Zheng Zhou & Yuanyuan Gong, 2023. "Is failure the mother of success? Prior failure experience and cross-border M&A completion by emerging market firms," Asia Pacific Journal of Management, Springer, vol. 40(2), pages 775-813, June.
    9. Robert E. Hoskisson & Mike Wright & Igor Filatotchev & Mike W. Peng, 2013. "Emerging Multinationals from Mid-Range Economies: The Influence of Institutions and Factor Markets," Journal of Management Studies, Wiley Blackwell, vol. 50(7), pages 1295-1321, November.
    10. Alfred Wong & Lu Wei & Dean Tjosvold, 2014. "Business and regulators partnerships: Government transformational leadership for constructive conflict management," Asia Pacific Journal of Management, Springer, vol. 31(2), pages 497-522, June.
    11. Barbara Krug & Alexander Libman, 2015. "Commitment to local autonomy in non-democracies: Russia and China compared," Constitutional Political Economy, Springer, vol. 26(2), pages 221-245, June.

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    China; international business; market design;
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