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The Puzzle of China's Township–Village Enterprises The Paradox of Local Corporatism in a Dual-Track Economic Transition

Published online by Cambridge University Press:  02 February 2015

Peter Ping Li
Peter Ping Li*
Affiliation:
College of Business Administration, California State University, USA
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Abstract

This paper seeks to reconcile and synthesize the diverse views about the township–village enterprises (TVEs) and local corporatism in the context of ongoing institutional changes in China as a transition economy. Specifically, I attempt to integrate the economic, political, cultural, and social explanations for TVEs, especially the two competing views of market competition and political corruption. I focus on the puzzle of TVE efficiency as well as the paradox of local corporatism as a government–business partnership with both a positive function of public alliance for wealth creation and a negative function of private collusion for wealth transfer. I argue that the key to both the puzzle of TVEs and the paradox of local corporatism lies in China's dual-track reform paradigm (i.e. a market-for-mass track and a state-for-élite track). Lastly, I discuss the critical implications for theory building and policymaking regarding economic transition in general.

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Management and Organization Review , Volume 1 , Issue 2 , July 2005 , pp. 197 - 224
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Copyright © International Association for Chinese Management Research 2005

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