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In this chapter we study internal and external, formal and informal, financing sources of Chinese firms during the period 1997–2006, by analyzing balance sheet data from the Chinese Industrial Surveys of Medium-sized and Large Firms for 2000–2006 and survey data from the Large-Scale Survey of Private Enterprises in China conducted in 1997, 2000, 2002, 2004, and 2006.

The following stylized facts emerge from our analysis: (1) State-owned firms continue to enjoy more generous external finances than other types of Chinese firms. (2) Chinese private firms have resorted to various ways of overcoming financial constraints, including reliance on the increasingly more mature informal financial markets, cost savings through lower inventory and other working capital requirements, and greater reliance on retained earnings. (3) Substantial variations exist in financial access among private firms, with small private firms facing more financial constraints whereas more established firms having financial access more equal to their SOE counterparts. (4) Although not as accessible as for SOEs, the Chinese formal financial sector does provide Chinese private firms with substantial financial resources, especially for their short-term needs during daily operations. (5) The most pressing financial constraint facing Chinese private firms is their limited ability to secure long-term funds to invest for growth, and resolving this issue should be one of the top goals of financial reforms in China.

The purpose of this paper is to develop initial conceptualizations on two types of Chinese multinational corporations (MNCs), that is, state‐ and privated‐owned MNCs, in terms of internationalization motivation, entry strategy, and managerial capabilities.

This is a conceptual paper. Existing case studies are cited as illustrations.

Compared to Chinese private MNCs, state MNCs are more likely to be driven by internationalization motives that are not based on economic rationality, to adopt an integrated entry strategy, but less likely to contain dynamic capabilities necessary for competing internationally. In the short run, Chinese private MNCs should outperform their state counterparts, which however does not necessarily translate into better survival rate.

The conceptualizations advanced in this paper should be tested empirically in future studies.

Given the differences between state and private Chinese MNCs, it would be a mistake for Western governments and the private sector to treat all Chinese MNCs as equals. Particularly, the concern about the private Chinese firms should place more emphasis on their capabilities to compete and collaborate as autonomous economic entities.

While much research attention has been given to “Chinese MNCs,” the author makes a distinction between state versus private MNCs from China and compares the two types with regards to internationalization motives, entry strategy, managerial capabilities, and performance potentials.

This study investigates, from a resource dependence perspective, the effects of domestic private firms' political connections and economic power on their labor law compliance in China.

This study used data from a large-scale nationwide survey on Chinese domestic private firms, the Chinese Private Enterprise Survey collected from 2004 to 2012, to examine factors of interest that affect firms' compliance to labor laws. Hypotheses were tested using OLS regression models with robust standard errors.

The results indicate that domestic private firms' institutional political connections specified by the presence of a union or a Chinese Communist Party committee is positively related to firms' labor law compliance, and firm owners' formal political connections indicated by their membership in the People's Congress or the Chinese People's Political Consultative Conference have a somewhat negative effect. The post-hoc analysis shows that firm owners' political representation at the county and city levels is negatively related with labor law compliance, while the political representation at the national level is positively related to labor law compliance. Moreover, the economic power of a domestic private firm is related positively to its labor law compliance. Finally, although the authors did not find evidence that the 2008 Labor Contract Law increased labor contract coverage, it did increase pension coverage after 2008.

The present study reveals a more refined relationship between domestic private firm owners’ political connections and the degree of labor law compliance. It also demonstrates that the economic power of domestic private firms has a positive effect on their labor law compliance. This implies the importance of the contribution of domestic private firms to economic and social development in China, warranting continued support of the development of the private sector in China.

This study adds to the sparse literature on the determinants of domestic private firms' labor law compliance in China. It also sheds light on whether political connections and the rising economic power of Chinese domestic private firms influence their compliance with labor laws.

There is consensus among scholars on how political institutional imprinting interprets the unique management and practice phenomenon of Chinese enterprises. However, little scholarly attention has been given to the different political institutional imprints that shape firms’ internationalization. Therefore, this study aims to investigate how communist and market logic political institutional imprintings influence firms’ initial ownership strategies in outward foreign direct investment.

Based on the propensity score matching difference in difference method and a sample of 464 foreign investments from 2009 to 2020 for 310 Chinese private firms.

The results show that private firms with market logic political institutional imprintings tend to adopt higher ownership and vice versa. As institutional differences increase, private firms with market logic imprintings are more risk-taking and adopt higher ownership, whereas private firms with communist imprintings are more conservative and choose lower ownership. When diplomatic relations are friendlier, private firms with market logic imprintings prefer higher ownership to grasp business opportunities and vice versa.

This study not only identifies the net effect of political institutional imprinting on private firms’ initial ownership strategy but also investigates the different moderating effects of current institutional forces to respond to the call for research on bringing history back into international business research and the fit between imprinting and the environment.

The purpose of this paper is to investigate whether and how affiliation with the government-controlled business association, namely, China Federation of Industry and Commerce (CFIC), affects corporate philanthropy in an emerging market.

Through an analysis of survey data gathered from Chinese private firms, this paper conducts multiple regressions to examine the impact of the CFIC membership on corporate philanthropy.

Empirical results show that the CFIC membership of private entrepreneurs is significantly positively associated with corporate philanthropy. Moreover, this study finds that the provincial marketization level and the firm Communist Party branch attenuate the positive association between CFIC membership and corporate philanthropy, indicating that the effect of CFIC on corporate philanthropy is more pronounced in regions with lower marketization level and firms without Communist Party branch. The findings are robust to various alternate measures of corporate philanthropy and remain valid after controlling for potential endogeneity.

Firms will be more active in corporate philanthropy to respond to the government’s governance appeal when they join the CFIC. This highlights the implications of political connections and in particular on the value of government-controlled business associations in the Chinese business world.

This study extends the literature on the determinants of corporate philanthropy and deepens the theoretical understanding of the governance role of business association with Chinese characteristics.

We take a state-stewardship view on corporate governance and executive compensation in economies with strong political involvement, where state-appointed managers act as responsible “stewards” rather than “agents” of the state.

We test this view on China and find that Chinese managers are remunerated not for maximizing equity value but for increasing the value of state-owned assets.

Managerial compensation depends on political connections and prestige, and on the firms’ contribution to political goals. These effects were attenuated since the market-oriented governance reform.

Economic reform without reforming the human resources policies at the executive level enables the autocratic state to exert political power on corporate decision making, so as to ensure that firms’ business activities fulfill the state’s political objectives.

As a powerful social elite, the state-steward managers in China have the same interests as the state (the government), namely extracting rents that should adhere to the nation (which stands for the society at large or the collective private citizens).

As China has been a communist country with a single ruling party for decades, the ideas of socialism still have a strong impact on how companies are run. The legitimacy of the elite’s privileged rights over private sectors is central to our question.

Chinese executive compensation stimulates not only the maximization of shareholder value but also the preservation of the state’s interests.

This paper proposes an examination of the relationship between female participation in top management teams and firm performance in the emerging Chinese private economy. It aims to examine the direct link between female participation in top management teams and firm performance. This is examined in the context of human capital and social capital associated with female top executives to investigate the origins and the contingencies of the linkage.

Drawing on resource dependence theory, the study develops and tests a set of hypotheses regarding the key relationships, using the data of listed private‐owned companies in China's security exchanges in 2008, with critical information on financial performance, corporate governance structure and the top management team composition of the companies. Regression analyses are conducted to test the direct relationship and the moderating effects.

The empirical analysis supports a positive relationship between the degree of female participation and firm performance in Chinese privately owned companies. The positive relationship is further strengthened by female top executives' human capital and social capital, consistent with the hypotheses.

The present study gains consistent results with research conducted in the Western context, suggesting that the top management behavior of Chinese private enterprises is similar to that of their Western counterparts, possibly due to the fact that they are less influenced by direct governmental control and are more profit‐driven than state‐owned companies.

The results of the study suggest that Chinese private companies can gain competitive advantages through identifying, attracting, and developing female managerial talents. And the female executives in the new era should be ones with systematic education and strong social connections. Both factors facilitate female executives to contribute better to their companies' performance.

The contribution of the present study is twofold. First, drawing on extant literature in the Western business context, the present study is the first to examine how female participation in top management influences firm performance in the context of the Chinese private sector, which contributes to the understanding of and offers insights to Chinese managerial practices. Second, the study enriches the extant literature by examining the moderating effects of female executives' human and social capitals.

The purpose of this paper is to analyse the key elements in the strategy of leading Chinese private firms in order to identify the key factors that are associated with the success of these firms.

Secondary data source from the self report of 30 of the top 50 private enterprises of 2004 in China as the basis for analysis. In analysing these self reports, a table was compiled that records the name of each case study firm, nature of its businesses, its ranking in the top 50 in 2004, background of the owner entrepreneur/CEO, history of the firm, and key elements of strategies.

The paper identifies that the key success factors of these firms appear to be associated with firm growth through business diversification, development of international market, strong emphasis on product innovation and quality enhancement, strategic marketing, product and corporate branding, and importantly, entrepreneurship of owner managers/CEOs and reform of corporate governance. Also revealed that top‐performing Chinese private firms tend to adopt a high‐commitment model of human resource management which emphasizes training and development, promotion by competence, extensive employee welfare provision, and enterprise culture development and management.

The secondary data came from company self reports with potential bias of self reporting. They were snap shots and anecdotal instead of longitudinal studies. They also contained top management's views only, which are not necessarily representative of the wider organisation. These methodological drawbacks mean that the data needs to be treated with caution and that more in‐depth empirical research is needed to shed more light on the subject that is of growing importance in understanding Chinese business and management.

This paper fills the gap in existing literature by revealing changes that have taken place in the privately owned businesses in China, key challenges they face and what strategic response they have adopted. The understanding of the business and management strategies of these firms is beneficial not only to scholars and students who are interested in China but also to organisational managers who wish to develop businesses with China.

This study aims to investigate the role of network in affecting private firms’ internationalization decision. Specifically, it investigates the way that business ties, political ties and status influence an internationalization decision.

On the basis of the survey data collected from Chinese private firms, this study distinguishes business ties from political ties and introduces network status. Binary logistic regression is used to test the hypotheses.

Results show that private firms that have business ties are more likely to internationalize, whereas private firms that have political ties are less likely to internationalize. High-status private firms are more likely to internationalize. Political ties negatively moderate the relationship between business ties and internationalization. High-status firms with political ties are more likely to internationalize.

This study provides theoretical and practical contributions. Results complement previous research on social networks in the context of Chinese private firms and have implications for managers who exert effort to internationalize their firms.

Purpose – To describe and analyze the situation prior to and during the initial stages of internationalization of Chinese SMEs, as well as analyzing the role of clusters as take-off nodes for such firms.

Methodology – A multiple case study is conducted based on semistructured interviews with five private-owned exporting Chinese SMEs. Also, data on Chinese industrial clusters are analyzed.

Findings – The findings complement the model presented with new knowledge. In the take-off situation, Chinese SMEs deviate from assumed paths due to disadvantages in the emerging Chinese market. In the initial stages of internationalization, the focus on indirect exports hinders the building of international relationships being the key for further international expansion. Cluster localization is a take-off node for individual dedicated exporters into international markets.

Research limitations – Few cases, co-location of firms in the advanced Yangtze River Delta region and issues of Chinese versus Western SME definitions limits the possibility to generalize the findings of the study.

Practical implications – Chinese as well as foreign firms can gain from this paper regarding, for example, that competitiveness built up abroad can be utilized for increasing the market share in an attractive domestic market, the pitfall of indirect exports can be overcome by developing direct international relationships, and cluster localization can spur the internationalization of (individual) Chinese SMEs.

Originality – Empirical contribution of internationalization patterns of Chinese private-owned SMEs as well as pinpointing the importance of the domestic market as trigger for internationalization.