Ownership, The Ability To Control The Authoritative Nature Of The Enterprise

This thesis employs the New-and-Old property rights method, endeavored to provide a way to understand the property rights and authoritative nature of firms form the angle of control capability for key resources.The main points of the thesis are as follows: Firstly, The thesis synthesizes the new and old property rights method, providing a more broad comprehension on property rights with an example to illustrate its meaning. Secondly, The existence of firms should facilitate specific investment so as to maximize the total rents. Because the nature of the firm is that it allocates resources by authority, it is necessary to take into account the sources of authority in the firm. The thesis develops the view that the control capability for key resources can be the sources of authority. Thirdly, the thesis develops the view that whether the capital should employ labor or vice versa depends on the control capability for key resources. Fourthly, Under the assumption of incomplete contract, the thesis also tests empirically by establishing related models. Fifthly, the thesis sums up the institutional arrangements for reinforcing the authority in the firm. Sixthly, The thesis analyzes the Shanshan Group, Hengdian Group and Xuji Group to illustrate the view that the sources of authority comes from the control capability for key resources. The change in the control capability may induce the corresponding change of property rights systems. The capability of entrepreneur can advance the firm's performance, while the control capability for key resources may lead the entrepreneur to invest in related specific investment. Besides the profit-sharing and "return for control rights", the control capability for key resources is also a motivation factor for entrepreneurs' investment. Finally, The thesis concludes that the reform of property rights cannot accomplish in an action, it is a gradual step-by-step process. Also, the institutional change is an inductive rather than a compulsory process. Therefore, the choice of property rights forms depends on whether a particular form can lead to a specific investment by the holders of key resources. Reform of property rights is an important condition for firms' long-term performance, but it is neither sufficient nor necessary for the performance improvement of firms.