Enterprise Clusters Backdrop Group Formation And Governance Of Private Enterprises

Business group has state-owned and private-run two concrete forms in China as an micro-organization related with market structure. To discussing this organization form from the angle of formation mechanism, governance process, and governance performance, as these two types of groups have different ultimate concrolling right and owership, we can not use the study of state-owned business groups instead of private-run ones, and vice versa. This paper try to makes investigation into the formation of private-run business groups from the angle of saving transaction cost, excution of business strategy, and evolution of social network. This paper aims to analyze the formation machenism of private-run business groups in the background of enterprises clusters, based on bring out the analytical framework of the governance of stakeholders in clusters and of the governance of parent-subsidiary relationship. And then this paper makes empirical test of these two governance mechanism.Present literature about China's busiee groups pays more attention on state-owned ones, but ignores private-run ones relatively. In fact, market contract is enlarging the market share of private-run busiee groups, and the market governance structure and types of traction is constantly penetrated by private-run business groups. Based on this kind of comprehension, this paper focuses on the investigation the formation mechanism of private-run busiee groups in enterprises clusters. We hold the idea that the mechanism of co-opetition in clusters has "compitition>cooperation" and "cooperation>compitition" these two concrete types, and when it takes the "compitition> cooperation" type, the traditional clusters will lose its established advantages and enterprises in clusters will form a "combined" type of newwork in clusters, and then private-run business groups in enterprises are formed. Concretely, according to varied types of cluster enterprise network, there are mainly four dominant modes of formation of leading enterprise group,"cooperation→competition→combination","cooperation→combination""competition→combination" and " comprehensive way"If the above theoretical analysis has some innovative mean, the analytical framework this paper set up for the governance of private-run business groups in clusters strictly complies with the practice. This paper set up an analytical framework for the governance of stakeholders of the private-run business groups in enterprises clusters, and choose appropriate indexes to test the governance performance of different stakeholders. The private-run business groups formed in clusters are bound by cluster stakeholders governance. The governance mechanism of stakeholders in clusters can be classified into direct and indirect governance mechanism according to whether the stakeholder's governance runs through intermediaries.This paper makes deep investigation of governance of parent-subsidiary relationship of private-run business groups from the angle of information controlling parent enterprise implements on subsidiary during the process toward the equilibrium of centralization and decentralization between parent enterprise and subsidiary. We hold the idea that the parent-subsidiary organization can help maximizing the interests for the business group, and this depend on whether the information controlling can be lead near the theoretical optimal level. The business groups should try to reduce the costs caused by subsidiaries'opportunistic behavior and parent enterprises'rational constraints bounded. The concrete mechanism of governance of parent-subsidiary relationship includes ownership structure and executive personnel arrangement. The ownership structure reflects the common governance performance of parent-subsidiary relationship, and the executive personnel arrangement reflects the performance of information controlling father enterprises impose on subsidiaries.The empirical test results show that employees have significant negative impacts on the value and profitability of the private-run business groups. Creditors can enhance corporate value significantly. Suppliers and distributors have negative impacts on the enterprise value. The government has the The greatest positve impact on the enterprise value. During those five indicators we constructed in this paper for the inderect government mechanism of the stakeholders in clusters, the product market development level and provincial concentration index of industry advantage have significant negative impacts on the business performance, the levels of factor market development and local intermediary organizations development have significant positive impacts on the enterprise value, and the general development level of clusters marketization enhances the enterprise value significantly.About the governance mechanism of the parent-subsidiary relationship, the cash flow rights and control rights the ultimate controller have on subsidiaries have significant positive impacts on the enterprise value, and the division level of those two kinds of rights have significant negative impacts. Whether the ultimate controller serves as chairman or general manager, and the ratio of executives taking part-time jobs in stockholders'unit have significant positive impacts on the enterprise value. Although the proportion of independent directors in the Board has significant positive impacts on the enterprise value, it has significant negative impacts on the business profitibility.Based on above theoretical analysis and results of empirical test, this paper makes discussion of the future research direction of private-run business groups in clusters.