Formal Institution,Alternative Mechanism And Behavior Of Private Enterprise

After 40 years of reform and opening up,the rapid development of China's economy is faced with such a characteristic fact: compared with other OECD countries,China seems to lack the institutional infrastructure to guarantee the rapid economic growth at the micro level.Then,a logical chain of questions is what mechanism is maintaining the economic operation of market entities,what the relationship between this mechanism and the formal institution is,and how to identify the reasons for the differences in the operation of this mechanism and the environmental constraints.Based on the above issues,the work of this paper can be divided into the following three aspects: first,on the basis of existing research,this article extends the extension of the alternative institution.Second,based on China's institutional practice,this study constructs a theoretical framework to analyze the relationship between formal institutional governance and alternative mechanism governance,and summarizes and explains four fitting states between them,namely,complete fitting,substantial fitting,surface fitting and complete deviation.Third,combined with the analysis of this theoretical framework,this paper empirically studies two alternative mechanisms used by private listed enterprises in China: introducing state-owned shares and private entrepreneurs into politics,and evaluates their operational efficiency and their mutual relations.Last,by introducing institutional environment variables,different effects of heterogeneous substitution mechanism under differentiated institutional environment are investigated,and the results are interpreted in combination with the framework proposed in this paper.Theoretically,with the clue of "evolution of social relations--transformation of resource allocation--response of enterprises",this paper examines the behavioral characteristics of private enterprises in different stages of institutional environment.Private enterprises,as rational economic subjects,will set different expectations according to their experience of interaction with the environment under the given constraints of the institutional environment,and adopt different action strategies with the goal of maximizing multi-period profits,which may use formal institutions or alternative mechanisms.According to the China's practice and experience,the alternative mechanism is classified into explicit alternative mechanism and implicit alternative mechanism.Explicit alternative mechanism refers to the two-way path connecting the government confirmed by the formal institution,which is often related to the political identity of entrepreneurs in the institution and the political status of enterprises.The implicit alternative mechanism refers to the implicit political capital established through the non-institutional connection between individuals and the government.Through empirical test,this paper reveals that the utility of the explicit alternative mechanism is stronger than that of the implicit alternative mechanism.Among them,the greater the institutional dividend brought by the explicit alternative mechanism of the system is,the greater the utility of the alternative mechanism with better fitting degree with the formal institution obtained in this paper is.In order to investigate the effectiveness of these two types of alternative mechanisms under different institutional environments,formal institutional environment variables were added.The results showed that no matter which alternative mechanism was improved,its positive effect on private enterprises was significantly weakened.Based on the above theoretical and empirical analysis,this paper draws the following conclusions:First,the operational "efficiency" of the alternative mechanism is related to its degree of fitting with the formal institution.The better the degree of fitting with the formal institution,the greater the role of the alternative mechanism will be,and the more it will bring institutional bonus to users.Besides,substitution effect also exists between the two alternative mechanisms.Second,in the alternative mechanism,the role of individual power is lower than that of institutional power,which is the function of institutional environment and market development stage.According to the empirical results of this paper,no matter in which case,the introduction of state-owned shares plays a stronger role in helping private enterprises to enter barrier industries and obtain financial resources than entrepreneurs' participation in politics.Third,Private enterprises will strategically use alternative mechanisms according to the characteristics and constraints of the institutional environment.Generally,when conditions permit,private enterprises will first choose the explicit alternative mechanism.This type of alternative mechanism enables it to have a high degree of interconnection with the government,which is reflected in the fact that private enterprises can interact with the government "institutionally" in multiple fields.Since such alternative mechanism accords with the formal institutional requirements in form,it can be more easily translated into stable,continuous and immediately available policy instruments.This indicates that in the process of China's transformation from a relational society to a rule-based society,the institutional power determined by the economic system still plays an important role in the market,which may continuously strengthen the income generated by the establishment of rent value of vested interests in the market and hinder the rational flow of factors of production.