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Property rights reform of township enterprises, ownership structure and participation of workers

Chinese papers League finishing. characteristics, while not completely as in the past perceived as mainstream, bottom-up change is entirely driven by a single conclusion; (2) local (community) government, restructuring of enterprises of the original operators, enterprises and community workers in the reform of the entire population mode after the specific choice of enterprise property rights, has obvious Hawk - Dove Game, local community government, restructuring of enterprises of the original game results between operators is the specific property rights of enterprises after the reform model chosen major decisive force. Township government and business managers to control the reform of township enterprises, general staff only passive participation; (3) the county government and the former managers had no choice momentum stock cooperative system; (4) whether the shares are not for enterprise workers very active, its ability to float depends on many factors; (5) employees of the restructuring of enterprises in the incentive mechanism, decision-making, management and other aspects of progress in giving positive affirmation; (6) ownership structure had no obvious effect on business productivity It shows that ownership structure is a necessary condition for productivity gains, rather than necessary and sufficient condition, nor is it the end of reform to employment and enterprise have a positive impact on long-term investment, restructuring the business to promote, market competitive power. The decisive driving force for reform and economic reform is one important contribution to the success of township enterprises have experienced a reform of property rights in full swing. Property rights reform in the early township enterprises, encourage enterprises to sell majority stake in the enterprise employees, The results will help protect the property rights reform of employment equity and enterprise employees the importance of safety measures, and as the stock cooperative system for exploring new forms of public ownership and effective way. Thus, the rural collective enterprises and converted into a . Jiang Zemin, the 15th largest in the work of the CPC report and recommended approval of this reform model. However, despite the officially respected, and township collective enterprises to deepen reform and the evolution of property rights does not comply with its established , although the Expected wide participation of enterprise employees (Note: Workers involved with multiple meanings, here is the enterprise employees participate in major trade unions on the property involved in the restructured enterprise, that enterprise employees represented by the shares held by the proportion of the total shares. In this research report essentially between the very strong association. in employee risk aversion, management ability, and many other relevant factors under the conditions given, assuming workers before the restructuring of enterprises operating on the expected to have sufficient information, whether the property involved and the employee participation, the company's future ability to have a decisive influence on value added. But the actual situation is that workers involved in lack of capacity on the reform process (in particular the right to participate is allowed to sell shares of some enterprises employees of the decision) may significantly affect their property rights in the results. More importantly, due to lack of participation on the reform process, enterprise workers is difficult to obtain the actual operating conditions on business and corporate long-term value of full information, so even if the property reform to allow employees to purchase shares, information asymmetry will also affect the purchasing decisions of workers, leading to the results of the employee share arrangements for lack of participation.)'s is, to the late 20th century, this model is 90 managers control - Since the early reform model advocated by the Government to become China's township enterprises is not the dominant form of property rights reform? summary to say that there are two different domestic and foreign academic assumptions. One hypothesis is that from the institutional arrangements to improve the efficiency of enterprises starting that cooperative shares system deviate from the reform program on track, because the average employee shareholding ownership structure on the existence of inefficient institutional arrangement. In this view the incentive for corporate managers is critical business, workers control the enterprise can not be solved this problem, and because corporate employees are more concerned about the level of wages and job stability, if it holds a large stake, employees have greater powers of decision-making process, will make it difficult for enterprises to focus on financial objectives, staff-controlled enterprises business objective is difficult to lock in the profit maximization; also not conducive to diversified equity investment incentives, companies will face under-investment and high risk issues such as trade unions (Zhou Qi Ren, 1998; SOCIOLOGY et al, 1998). Another hypothesis is enterprise system, starting the decisive factor in the form of arrangement that the reform of property rights is essentially a political process of bargaining, the result depends on the parties involved in the process of negotiations between the capabilities. According to this view, the majority of the employees of township enterprises is not access to equity was mainly due to their disadvantaged position the organization (Tanqiu Cheng, 1998; Li, 1999; Ho, Bowles, and Dong, 2000). this study for the restructuring of enterprises and their employees use survey conducted by the data obtained (Note: a county enterprise survey conducted in Jiangsu, a total sample of 100 companies. These companies are manufacturing companies, in a sample prior excluded when particularly large or do not have the corporate form Special small-scale enterprises. In the questionnaire, we also collected data on the sample output value of enterprises, revenue, costs, taxes and profits, assets and liabilities, labor, nearly 50 indicators from 1995 to 2000 data for 6 years. Staff Survey in Jiangsu and Shandong provinces, respectively, a total of 20 enterprises for restructuring, a total of 177 valid questionnaires.) attempt from an empirical point of view, to test the above hypothesis. This structure is: In the second part we first reform of property rights the process of restructuring of the three major stakeholders in restructuring motives, goals and attitudes of discrimination theory to explain the company's shares after the reform of property rights is how the local government, business layer and employees, the community of farmers and other key players in the distribution between . focuses on the ownership structure after the restructuring that actually depends on local governments and enterprises of the original managers of the attitudes and needs, depending on the layer of local government and business managers of these two games between the different stakeholders; which employees are involved in restructuring business after only a passive equity, was pre-determined. In the third part, we use business survey data, employee share participation of enterprises of different groups,spyder jackets outlet, analysis and testing of enterprise restructuring and improve the enterprise of different ownership structure management performance; ownership structure of the impact on employment levels, and ownership structure on investment behavior. Finally, in conclusion of this study summarizes the main findings and point out its policy implications. II , Township Enterprise Reform: Stakeholders and the game (a) of the Township Enterprise inevitability of change and restructuring power 90 years after the beginning of a buyer's market moved toward the low-skilled content and low investment in rural enterprises increasingly difficult to sustain competitive strategy; while state-owned enterprise reform has been intensified, more competitive rural enterprises (including private enterprises and other joint ventures, etc.) the rise of the original township collective enterprises the relative advantages of the traditional system of state-owned enterprises significantly degraded; civil rights consciousness recovery and township collective enterprise level led to more attention to their own interests and gradually increase pressure for change; CPC 14th largest, the socialist market economic system is finally established, and so on , all of which constitutes a fundamental restructuring of township and village enterprises incentives and internal logic. of course has its corporate restructuring reform of endogenous logic, however, whether endogenous dynamic enterprise restructuring how strong, if not the central government change the basic institutional arrangements of social recognition, not the local government for its financial hard constraints need to actively promote the reform process is in vain, corporate restructuring can not be the Liaoyuanzhishi, can only be a spark. We restructured enterprises in Jiangsu survey data of 100 results show that the property right reform of township enterprises with a typical government, township government and business operators to consider and enthusiasm are the main driving force of enterprise property rights reform, enterprise restructuring is almost 100% by the three stakeholders-led (Table 1). the government above the county level to promote the restructuring difficult to identify the motive. possible explanation is that, through the early 90's after the macroeconomic changes in the financial system, the township government's financial constraints than enhanced, by adjusting the tax is to increase organizational and revenue collection methods, an important means to alleviate the financial constraints. To this end, necessary to promote grass-roots government to adjust its financial and business associations, they seek to prevent tax avoidance (Note: the government above the county level to promote the restructuring of the motivation may be a very complex issue. Previous studies involving inadequate. This article attempts to give based on limited information The most common explanation..) can be seen from Table 2, the enterprise property rights since 1995 reform period, a steady increase in the absolute amount of the actual business tax in 2000, 100 companies, the total taxes paid 1.8 times that of 1995, 5-year average increase of 12.6%. At the same time relative to the enterprise in terms of total output, although the proportion of tax revenue between years was small fluctuations, the rise was equally significant. 5-year rate of increase of the output value of more than 1 percentage point! It is not difficult to understand why the County and restructuring of the government above the county has the enthusiasm of the. a phenomenon worth noting is that Table 1 shows that there is no one business is required to be restructured enterprise workers. Behind this phenomenon there are two possibilities . First Workers no requirements as to whether restructuring; the second is the restructuring of business-to-staff requirements can be ignored. from our employees made aware of the interview is mainly caused by the first point, the reason is because the employee groups not involved in the decision-making in the enterprise, ordinary employees of the enterprises do not have any control over, and lack the necessary information related to restructuring. In addition to as the second important reason. The reason why we originally from the village government and business are motivated in-depth restructuring of the angle and found property system of township enterprises has the power and inevitability of change. 1. from the village Government research shows that perspective (Zhou Qi Ren, Hu Zhuang Jun, 1987), the founder of township enterprises mainly to increase the motivation of the community income and community welfare of the community government revenue maximization and provide community employment opportunities. However, the traditional , the township government through the development of township enterprises expanded their revenue streams more and more difficult financial goals and motivation to achieve. township government through the development of township enterprises to expand their revenue streams to achieve the financial targets with a variety of overt and covert channels. is difficult to figure out whether through hidden channels created for the village government and the evolution of how much revenue trend, according to Wen Tiejun estimated profits of township enterprises is not included in the implicit, and the transfer of up to 70% of revenue, and there are Most of the revenue into (Note: Wen Tiejun: profits turned over and the industry to subsidize agriculture through spending. on the 100 rural enterprises statistics show that since 1995 the profits of these enterprises turned over to the village despite the increase, but the increase is very slow, and then industry to subsidize agriculture, construction showed a sharp decline in agricultural expenditure is the trend (see Table 2) (Note: Since these 100 companies, 23 companies already experienced in 1995 years ago, the reform of internal management system, rural government revenues from the dominant sources of significant decline in status, it could be 1995 years ago as a result of the reform. But after the reform, not a fundamental change in enterprise property right system, you can assume that the business interests and local government relationship between the adjustment did not reach the point of fundamental change. the reasonableness of this assumption is, in fact, these enterprises in the succeeding years and lived through the Unit: million times,% , of course, development of township enterprises there is another goal, namely, community residents and create jobs. The motivation for the development of township enterprises may only be explained by the traditional system in rural industrialization and policy constraints, by the people of rural industrialization has inhibited the effectiveness of the early stages. With the general expansion of rural industrialization in the development of rural industries are no longer under the conditions of political risk, it increasingly becomes a soft constraint. because, due to government development financial objectives of township enterprises has always been there, no matter how local authorities under the collective property rights seriously interfere with business (Note: The intervention motivated rent-seeking needs of local leaders in addition to other, equally or to the Government's financial objectives.), although the company profit maximization is not a universal phenomenon of collective enterprise, there is no doubt that the more business approach limitation is that profit maximization by the residual claims of business arrangements constraints.) profit maximization more conducive to local government's financial objectives. Thus, the same thing, the business managers and local governments have to achieve maximum profits will, so that employment objectives will become a secondary objective, it is only to ensure financial targets achieved in the circumstances will be an effective constraint factor. This means that employment goal may be to make way for enterprises to profit maximization, only to increase employment a business expansion, to achieve the objectives of profit maximization, when necessary, will go to efforts to implement the employment objectives. At this time, to ensure that employment goals and collective property rights are sure to have business links between the two is increasingly weak. employment objectives will not re-constitute the local government to maintain and stick to the reasons for enterprise property rights, leaving local governments more inclined to enterprises willing to accept assignment of property rights, the implementation of enterprise restructuring. because of the local (community) In this particular condition, with drive enterprise restructuring initiative, which makes reform a necessity, so that may become a reality (Note: In addition, Jiang Changyun (2000) also from the village there is hope that the government cut off as soon as possible with the debt chain between the township and village enterprises, township enterprises in order to avoid business risks the tendency to reduce the costs of monitoring the angle that the inevitability of corporate restructuring.). 2. From the perspective of business operators business generally in the early primary and selected by the village government the interests of the rural caregivers and government agents. But the direct control of its business is easy to become an independent village outside the government in a separate interest group. because of their independent interests of the molding and curing, making the government of the enterprise and its the supervision of agents is becoming increasingly costly. This allows rural enterprises the Government has in fact never stopped the actual control of enterprises and their agents the right to negotiate for the adjustment of the mid-80s, the full contract system, the operator contract The implementation of such system is the form and the results of such an adjustment. operators had long served as business agent of the two results have been favorable: one between the village government and business interest growing asymmetries strengthen the groom operator control of the business strength; second operator in the long-term growth of the practice of their own human capital accumulation. This is one aspect of the problem; Another aspect of the problem is that although managers actually control the intensity of the enterprise continues to increased, but because of the lack of effective channels and timely measure of business performance to improve incentives for managers, including realization of its growing return on human capital accumulation, which led to the actual enterprise managers to control and obtain its legitimate enterprise between the remaining serious imbalance. There is evidence that managers tend to adopt a variety of ways to increase their surplus in the enterprise so that the ratio of the distribution of income and the nominal effective institutional arrangements determined by the income levels of the growing bias. However, this kinds of non-institutional arrangements to promote the benefits after all, is Among the business) there is always further institutional changes and adjustments to make it which also implies restructuring of power. In this case, the operator may be the motivation for change a good business with those who are different, they want to get out through the restructuring of enterprises from the original in order to find the institutional framework to better jobs ..) The corporate officers of the Township Enterprise implication of these requirements change the climate event of the inevitable burst of the right cupola power. In 2002, entrepreneurs and our discussion, most of the original operators of the enterprise, they pointed out that Before restructuring, there is actually in the enterprise business requirements for change of property rights (Note: Although the direct answer to a restructuring of the table should be A total of 23 enterprises. In view entrepreneurs, no matter how great the need for reform, without the consent of the local government can not be realized. so the answer has a certain rationality.). In addition, the improvement of market environment, product and factor markets, business development integrity makes it possible protection from the Government, but also encourage business operators to increase pressure on enterprise property right system, an important incentive for reform. In short, the government and Among the original business, all implied pressure and power of enterprise restructuring. needs and is just waiting for the appropriate institutional and policy environment, once with these conditions, the necessity of property rights reform of township enterprises will be turned into a possibility. (b) of the township enterprises and rural stakeholders in the reform of property right system equity allocation of property right system reform in township enterprises is inevitable, the system increasingly becomes infinite space case, the property right reform of township enterprises Basically, the program became established stakeholders in rural enterprises as a result of negotiation and compromise. stakeholders in rural enterprises based on their close relationship with the degree of restructuring can be divided into village government, business owners , enterprise employees, community residents and other key stakeholders and the upper government, banks (credit unions), community residents and investors outside stakeholders such as the edge of two categories (Note: Jiangchang Yun: Economic Research is not decisive (Note: the upper primary role of government influence through policy behavior, which may affect the direction of institutional change and space, therefore, its mode of action is to provide more ownership reform of township enterprises and conditions of the macro-policy background, and increasingly higher levels of government to exit the grassroots In a perfect market economy, when companies appear insolvent because of bad management, the banks, credit unions can exercise control and take over the business; which enterprises face credit constraints is relatively hard. but in the mid 90s because the country between the government and township and village enterprises, village government and between the Government of the upper, upper government and the complex links between banks credit unions, and the relatively poor overall social credit environment, this credit is less the existence of hard constraints the. Thus, the bank credit for rural enterprises and joint stock system reform of property rights of choice, or highlight (Jiangchang Yun, 2000)).. In addition, the interests of community residents in large part by the village government representatives (although the village government in fact has become an independent interest group, the role of such representatives in name only), Similarly, the interests of ordinary workers in the enterprise restructuring in the business who is the representative of the interests of enterprises collectively (although The two are totally different stakeholders). Experience has shown that both the community of farmers, or the enterprise of ordinary employees (Note: Regarding the reform of property rights in the enterprise employees in the process of participation, our analysis shows that very limited survey information.) enterprise restructuring in the township and property rights arrangements, participation is extremely limited, in front of a survey of 100 companies have shown, corporate restructuring or the request from the higher levels of government (50%), or local government or business leaders are positive (50%) just not the majority of enterprise employees should be required restructuring. It is typically reflected in the restructuring of enterprise employees the right to participate in the no decision-making position. This is an interview in the enterprise and the reform of township enterprises around the understanding of the situation is the same. This kinds of phenomenon is very normal. we all know, before the restructuring of township enterprises in the implementation of the contract system in general, although the contract a variety of ways, but the Employer has been a township government, while the contractor is the business manager (layer), the general community basically no farmers or workers involved. If we push forward, the birth of their township collective enterprises from the date the owner has never exercised the right. Similarly, the reform of property rights in the township and village enterprises, continues to play a role in path dependence.