Research On Growth And Institutional Innovation Of Private Enterprises In China

In the introduction chapter, the basic structure of this paper are introduced andillustrated briefly through four aspects, namely research background and significance,literature review, research methods and ideas, and innovation as well as inadequacies.The second chapter: Growth and innovation-related fundamental theories ofprivate enterprises in China. Because theoretical study of Chinese private enterprisesinvolved with growth and innovation are vast and complex, it’s nearly impossible thatthis particular article can cover everything, and only theories related to this particularresearch will be covered, including private ownership theory of the Marxism classicalwriters, private sector growth theory and new institutional economics theory. Firstly,the growth and development of private enterprises in China is based on the privateownership theory of Marxism classical writers; secondly, in economic reality, Chineseprivate enterprises mostly encountered and suffered from growth crisis in the processof development, then we should draw from growth theory of relatively matureenterprises of western world to guide and put into practice; finally, the traditionalmainstream economics, which adhere perfectly rational people, perfect information,and hypothesis such as zero transaction costs and so on, lead to the contradiction andconflicts between theory and reality, so it can not really effectively describe theenterprise operations and growth process, and consequently, the research on thegrowth of private enterprises in China cannot implement and succeed without thesupport and guidance of new institutional economics theory.The third chapter: Analysis on reality of private enterprises in China. Thischapter summarizes the overview of current development status of private enterprisesin China, and analyzes the important role of private enterprises presented in thenational economy construction. Through reforming and opening up in recent30years, Chinese private enterprises have become the major component of China’s socialisticmarket economy, keeping playing a more and more important role in the entirenational economy. However, as some private enterprises in China seizing theopportunity to grow bigger and further, there are also many private enterprises, whichonce upon have been more successful than others, trapping in the increasingly fiercecompetition in the market and facing the growth crisis. This chapter will use the angleof new institutional economics to conduct analysis of barriers to the growth of privateenterprises, and concludes: In order to achieve sustainable growth of Chinese privateenterprises, the key factor is the compatibility of the collection system that decidesthe growth of an enterprise (including the internal institutional structure of theenterprise institution and the external institutional environment of the enterprise).Here the compatibility contains two meanings, first referring to, in the institutionalcollection, the compatibility between the internal institutional structure of theenterprise and the external institutional environment of the enterprise; secondreferring to, in the reality of enterprise growth, the compatibility between thecorporate design of the internal structure of the enterprise and the externalinstitutional environment formulated by the government. Next, the chapter discusses,of Chinese private enterprises in the current growth condition and among externalinstitutional environment and internal institutional, what specific existing institutionalbarriers structure has to overcome through institutional innovation.The fourth chapter: Analysis on the change of external institutional environmentof private enterprises in China. Institutional environment is the sum of all externalinstitutional environment factors that impact the growth of private enterprises. Thesefactors are dominated both by national and social forces, and can be divided into fourareas: legal environment, political environment, economic environment and socialservices environment. Legal environment is the safeguard to the entire institutionalenvironment, and there are three basic requirements for a proper legal system:Completed legislative, fair justice, and strict law enforcement; the construction ofpolitical environment consists of two levels, the design of the central policy objective and the implement and execution of the policies; economic environment is consideredas the most important part of the institutional environment to the growth of privateenterprises, of which the two most critical aspects are the financial environment andthe market management; social services environment, if fully functional, plays animportant role to the mobility of production elements required by private enterprisesin order to grow, and also reflects the degree of advancement of a country’s economicdevelopment, and the most important aspect of social services environment can beinvestigated through two sides, of which one is by establishing social intermediaryorganizations, and the other is by the development of the professional market. Thischapter starts the discussion from two aspects of the market and the governments,from which on one hand sorting and classifying the route of changes of marketeconomy system, and discussing the national selection behavior of the market system,and on the other hand investigating and exploring the evolution process of theinstitutional environment of our private enterprises and the impact of preferences oflocal government on private enterprises. Ultimately, for providing theoreticaldirection of the choice of the path of institutional innovation of private enterprises,the chapter exemplifies and analyzes the demand-supply model of the institutionalenvironment of in-growth private enterprises.The fifth chapter: Analysis on the change of institutional structure of privateenterprises in China. Firstly, this chapter discusses the emergence path of privateenterprises in China, through which summing up the characteristics of Chineseprivate enterprise system and exploring the dialectical impact of institutionalcharacteristics on private enterprise growth. Next, this chapter classifies the change ofgrowth trajectory by sorting out modes of the development of Chinese privateenterprises, summing up and exploring the inspiration of the enterprise institutionalchanges of "Wenzhou mode","Sunan mode","Zhujiang mode" brought to theNortheast old industrial bases and the Midwest developing private enterprises. Finally,the chapter exemplifies and analyzes the demand-supply model of the internalinstitutional structure of in-growth private enterprises and the equilibrium-game model to provide theoretical direction of the choice of the path of institutionalinnovation of private enterprises.The sixth chapter: Analysis on comparisons of the institution of American andJapanese enterprises and its revelation and enlightenment for the growth andinstitutional innovation of private enterprises in China. Compared to our country’sprivate enterprises, private enterprises in developed countries has accumulated a greatwealth of experience of institutional change and innovation through their history ofcenturies, which are primarily dependent on their relatively sophisticated enterpriseinstitution and system, so in order to study growth of private enterprises andinstitutional innovation in our country, it is necessary to draw and learn from theexperience of institutional innovation of enterprises in developed countries. Thischapter will take examples of enterprises of the United States and Japan, comparingand analyzing their institution and system of property, organization and management,in order to draw some practical advice and useful inspiration for the institutionalinnovation of private enterprises in our country.The final chapter: Suggestive options of the environment-compatibleinstitutional innovation path of in-growth private enterprises in China. Throughprevious chapters, by analyzing the reality of Chinese private enterprises, the changeof institutional environment and institutional structure of Chinese private enterprisesand the comparison with institution and system of enterprises in developed country, itis clear understood that, as to the growth situation of current Chinese privateenterprises, the most critical factor is the compatibility of the institution set withinitself which determines the growth of the enterprise (including internal institutionalstructure and external institutional environment) as well as its compatibility with thereality that the enterprise is in. In order to achieve healthy and sustainable growth,private enterprises in China must vigorously promote institutionalenvironment-compatible innovation after clearly understanding the reality on thedevelopment basis of enterprises, to relieve from external barriers of enterprisegrowth while enhancing the internal power of enterprise growth. This chapter will discuss in details, through institutional innovation, how to avoid and overcomeobstacles, which heavily impact and impede the growth of enterprises, existed withinexternal institutional environment and internal institutional structure of currentprivate enterprises.