Study On The Formation Of Township And Village Enterprises Institutions Based On Beyond Property-Right Theory

Chinese township and village enterprises (TVEs) have made amazing achievements since the country's reform and opening up which began three decades ago. Sustainable development of TVEs now plays a crucial role in addressing the issues concerning agriculture, countryside and farmers, and especially in achieving the goal of forming a new rural China. The institution of enterprises is decisive to their development, which induces scholars to pay much attention on the institution of TVEs, especially on the causes, performance and reformation of the vague property-right. Mainly based on property-right theory, the research of most scholars are limited to the inner property-right of TVEs. Their recommendations of solving the problems concerning TVEs put too much weight on privatization of property-right. They lack more systemized theories to solve the problems when the results of privatization don't meet their expectation. Yet, some British scholars proposed at the end of last century a beyond property-right theory, which supplements the limitation of property-right theory.This dissertation will thus employ the beyond property-right theory as a basic theoretical framework to analyze the institution of TVEs. It introduces competition theory and encouragement theory, as well as plenty data, into complementing the beyond property-right theory framework, so as to form a more systematical theoretical framework, which will be easier to analyze. This new theoretical framework will serve to analyze the institutional performance and causes of reformation during the development of TVEs. The mentioned analysis will finally generate some recommendations for further perfection of TVEs institution.The author argues that the effects of corporate governance mechanism depend on whether it can adapt to competitions well. Peculiar institutions of corporations are formed and reformed in needs of adapting to competition and elevating their performance. Competition rules and how severe the competition imposes a decisive even crucial impact on the formation and effect of three corporate mechanisms involving in the management salary motivation, management selection and financial of enterprises and the three corporate governance mechanisms interact while perfecting themselves separately. The interactions might be complementary, but they might also raise contradictory requirements to the corporate property-right. Thus, the perfected framework of beyond property-right helps to go beyond the limitation of theory of property-right, so as to base the analysis of corporate institution on the fundamental functions to be fulfilled by the corporations rather than on a regulating mechanism, namely, the division of property-rights. People can then articulate explanations for the performance and reformation of most reformed TVEs, as well as explanations for the successful development of collective-owned township and village enterprises of early period and those still remaining this kind of ownership. The vague of property-right does not necessarily produce obstacles to fundamental functions of corporate governance. Different property right institutions may all be well functioning. Thus, different kinds of ownership may be seen in TVEs of China. A well developed market of all economical elements will in the future enable these enterprises to choose their ownership forms according to situations, so as to perfect their governance mechanism. All in all, endeavor from both sides, namely, enterprises and government, are needed to be put forward, so as to serve TVEs good circumstance to get good position in the global competition.