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This paper explores the dynamic relationship between politicians and entrepreneurs in the governance of business organizations in transition China. A longitudinal case study of Kelon (1984–2001), a product of politician-entrepreneur alliance in China’s household appliance sector, reveals how certain political resources that once assisted the entrepreneurs in creating competitive advantages in transition...
The paper finds that whether local government leaders in China are motivated to privatize their SOEs depends on if the ownership transfer is expected to stimulate sufficiently high growth of local tax revenues. Meanwhile, for a specific privatization program to succeed, it has to overcome the workers compensation constraint and the bank debt-servicing constraint.
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