A Study On The Soft Budget Constraint Under The Dependency Relationship Structure Of Government And Enterprise

The China Merchants Steamship Navigation Company(CMSNC for short)was the first national shipping enterprise in modern China.It was founded in 1872 by Li Hongzhang,who was an famous advocate of the westernization movement in the late Qing Dynasty.It was also the earliest enterprise to implement the management system of“government-supervised and merchant-managed”.In the end of the Qing Dynasty,the CMSNC experienced a tortuous course of development,and its prosperity and decay were closely related to the Qing government.On the one hand,the Qing government supported the CMSNC in the capital,taxation,business and other aspects;on the other hand,the CMSNC supported the Qing government in grain transportation,military transportation,financial and other aspects.Based on the existing soft budget constraint research,this study proposes the concept of“bilateral soft budget constraint” to analyze the soft budget constraint phenomenon between the Qing government and the CMSNC.This study mainly adopts the literature method to collect the relevant historical materials of the CMSNC,and carries out qualitative analysis to analyze the historical data has collected.The main contents of this study can be divided into the following aspects:(1)summarize the development of the CMSNC in late Qing Dynasty.(2)analyze the reasons and characteristics of the relationship between CMSNC and Qing government.(3)analyze the budget constraint softening situation of CMSNC and Qing government respectively.(4)analyze the relationship between bilateral soft budget constraint and organizational risk mitigation,that is,the impact of bilateral soft budget constraint on the Qing government and CMSNC.(5)analyze the role of water transport in the relationship between the Qing government and CMSNC,and to further analyze the relationship between water transport's decline and the organizational attachment's disintegration.(6)draw the conclusion and discuss further.This study has found: Under the system of "government-supervised and merchant-managed",the CMSNC and the Qing government formed a two-way dependence relationship,with their dependence on each other.In the two-way organization attachment,the budget constraints of the CMSNC and the Qing government were softening,different from the previous research in the "one-way" soft budget constraint and "inverted soft budget constraint",which was a bilateral soft budget constraint.The bilateral soft budget constraint leads to the softening of the risk constraints faced by the Qing government and the CMSNC,so that both dependent parties can effectively shifted and defused organizational risks.Water transport was the main reason that the CMSNC and the Qing government formed a dependency relationship,which has an important influence on their attachment relationships.When the water transport declined and ended,their dependency was loose,and then it has different effects on their budget constraints.