Sponsor(s): Industrial economy research institute
12 issues per year
Current Issue: Issue 07, 2018
Journal official website:http://www.jjgl.cass.cn/CommonBlock/GetSiteDescribeDetail/1242?channelID=1242
Economic Management Journal is supervised by Chinese Academy of Social Sciences, and sponsored by Institute of Industrial Economics, Chinese Academy of Social Sciences. It aims to report the economics-based management research, which is an indispensable reference for the management of scientific research. Its scope covers macro-economic management, industrial and regional economic management, business management, management science and engineering, public administration and management reviews. The Journal is included in CSSCI.
Associate Editors in Chief
Excess financing, crowding-out effect and capital “off real to virtual”: evidence of China’s real listed companies from 2007 to 2015
Business Management Journal,2018,Vol 40,No. 07
Against the background of the new normal with slowing growth period, structural adjustment period, and stimulus policy coming into play, the development of the real economy is facing unprecedented pressure and risks. Investment efficiency is continuously declining; general commodity prices continue to be sluggish; and the return rate of physical investment and labor productivity growth and total factor productivity have shown a downward trend. In particular, the basic industrial sectors such as manufacturing and heavy industry have been severely impacted, and doubts remain as to whether they can continue to promote economic growth. The divergence between the growth rate of money and GDP growth, the deviation of financial growth and investment efficiency, and the deviation of asset prices from commodity prices. Those problem of capital disintegration become more and more apparent, which is the main factor of the real economy development risk. Monetary growth and the scale of financial assets continued to increase. Asset prices continued to grow. The proportion of financial value added in GDP continued to rise. Capital “off real to virtual,” high leverage, and the false profit of virtual economy lead to serious asset bubbles and abnormal development of virtual economy. The result of the “off real to virtual” are as follows: Firstly, capital does not enter into the real economy, and leads to arbitrage activities within the financial system; secondly, there is a misalignment of physical capital operations, which make capital excessively flow to real estate without flowing into the manufacturing industry; and thirdly, the inflow of real economic capital have the lengthy financing chain and high financing costs. The trend of financialization has led to the expansion of external financing needs of enterprises. At the same time, special interests parasitizing in the dual financial market have become financial clients. They have used bank systems to absorb funds to penetrate into private finance in order to extract huge interest-rate spread. In particular, during the economic downturn, the company’s operating risks have increased. To ensure that capital chain will not break, companies need to absorb a large amount of capital to cope with corporate risks, so that companies with financing advantages will make substantial financing in the financial market and produce crowding-out effect for non-listed companies. This paper studies the excess financing behavior and crowding-out effect of listed companies on the purpose of financial equity investment. We explain the microcosmic mechanism of capital divestment and select the data of listed companies of real economy from 2007 to 2015 to do empirical tests. The study finds that: 1 The increase in operating risk under the new normal economy leads to the financing needs of the company to increase the value of company is an important reason for excess financing of listed companies; 2 The excess financing behavior of listed companies strengthens the price discrimination in the dual financing market through the crowding-out effect. The feedback effect of the market caused both the listed company and the non-listed company’s capital to transform real economy into virtual economy. 3 In the new normal economy with high business risk, the listed companies participating in financial capital investment have decreased their attention and enthusiasm for real investment, and their motivations for transforming real economy into virtual economy have become stronger. State-owned, eastern and commercial listed companies have a larger scale of excess financing. There is even greater motivation to invest virtual economy and crowding-out effect of the non-listed company financing market is even more serious. Therefore, the government should scientifically and reasonably guide the flow of capital to the real economy, introduce regulatory policies to prohibit the refinancing of listed company financing funds entering the financial system again, eliminate the participation of listed companies in controlling financial companies, and strengthen the loan support for non-listed companies.
On management innovation of Chinese enterprises in the new era: taking Haier system management mode as an example
Business Management Journal,2018,Vol 40,No. 07
Contemporary era breeds thoughts and practice generates theories. This idea enlightens the current paper to develop a triangle-form research framework that comprised by contemporary era traits, practical innovation, and theoretical development. In addition, the current paper applies Haier system management mode as the case to explain our research framework step by step. Contemporary era traits include two dimensions. The first is “Five Major Turns,” which characterized by the changes from low-speed status to high-speed status, from deterministic scenarios to uncertain scenarios, from linear change to nonlinear change, from physical space to virtual space, and from chasing to leading. The second is “Five Revolutions,” the components of which are industrial technological revolution, industrial structural revolution, industrial organization revolution, industrial layout revolution, industrial ecological revolution. With regard to the practical innovation, Haier’s system management mode and managerial practice innovation lead the China and even the world. The breakthroughs of Haier model include the subversion of the enterprise: the enterprise’s platformization; the subversion of the customer: the users’personalization; the subversion of the employees: the “Integrating Order with Personnel” model. Haier management model, apart from Fordism and Toyota Production System, has subverted the traditional management theories and created the new era management theories. With regard to the theoretical development, the renewed understanding of eight key elements in enterprise is following. ①The product element includes product industrialization, modularization, platformization, dematerialization, intelligentization, conceptualization, creativity, advertising, financialization, and recycling. ②The employee element includes four sub-elements, which are illustrated as employees 1.0, supervisee and the“tool man”; employees 2.0, self-managers, prospective owners; employees 3.0, self-makers, partners; employees 4.0, self-organizers, social people. ③The customer element is expressed as the company’s innovation, capital, production, sales, pricing, and management are all generated from customers. ④The cost element calls for changes from traditional cost management to strategic cost management, establishing a cost concept of integrity, externality, intangibility, incalculability, long-term, harmony, and sustainability. ⑤The profit element considers profits come not only from actions, final part, enterprises’ interior, and value creation, but also from ideas, every aspect, the enterprises’external part, and the transfer of value. ⑥The strategy element is imperative to shift from “strategic theory” to “non-strategic theory” and to establish the idea that “strategy is essentially a way of thinking.” ⑦The management element proposes “de-management,” namely achieving “doing nothing” through system creation. ⑧The organization element includes four sub-elements, which are enterprise 1.0, the owner-managed enterprise and unlimited liability; enterprise 2.0, the company-based enterprise, from unlimited liability to limited liability; enterprise 3.0, platformbased enterprise, from the development of the border to the development of the borderless; enterprise 4.0, eco-enterprises, from ecological to multi-ecosystems. The aforementioned explorations, either at practical level or at theoretical level, aimed at “the construction of China’s indigenous theory and leading China academic creation,” and incorporating the result into the worldwide enterprise management theory innovation.
Business Management Journal,2018,Vol 40,No. 07
Although there are a lot of studies of brand issues, the theme of brand is still a decentralized background concept. In addition, researchers in the field of brand management are extremely concerned about brand relationships, customer experience and co-creation. In recent years, a number of conceptual studies and case studies have clearly defined the integration of service-dominant logic and brand research as the research theme. Starting from the core claims of service-dominant logic, the scholars rethought about the logical starting point of the brand value formation mechanism and management strategy. This indicates that the research in the field of brand value is being gradually integrated into the perspectives of relations, insiders and stakeholders. Brand research has also begun to develop in the direction of brand co-creation. However, in the absence of a conceptual framework for the theoretical basis, no consensus has been reached on brand value co-creation, which has triggered a series of research issues. Therefore, it is very meaningful to study the connotation and conceptual model of the brand value co-creation of platform. Firstly, this paper defined the concept of brand value co-creation of platform. This paper, proceeding from the two basic concepts of value and co-creation, deeply explored the value creation, platform value creation, classic brand value, and the brand value under Web2. 0. The difference among them constitutes the connotation and theoretical basis of platform brand value co-creation. Brand value is not only created through the dual relationship between enterprises and individuals. It is also created through the social network relationship and social interactions between all the stakeholder ecosystems. Then this paper summed up the theoretical foundation for platform brand value co-creation: it is rooted in the theoretical foundation of platform value co-creation, but has some difference from it. At present, there are mainly three views on platform brand value co-creation. One is the theory of platform brand value creation based on the perspective of consumer experience proposed by Prahalad and Ramaswamy. The other is the theory of platform brand value creation based on service-dominant logic proposed by Vargo and Lusch. The third is the theory of platform brand value creation based on brand ecosystem, which was proposed by Ramaswamya and Ozcanb. Secondly, based on these studies, this paper proposed a conceptual model for platform brand value co-creation. The core of this model is brand engagement platforms which connect the ecosystem of platform supply and demand, brand experience and brand capability ecosystem to form a closed loop. The conceptual model opens the black box created by platform brand value. From this model, it can be seen that platform brand value is created through experience creation, in which individuals brand experience is reflected in the interactive environment provided by brand engagement platforms. The realization of brand value is subjective, and changes with the individual experience created by co-creation. The outcome of brand value is reflected in the brand capability ecosystem. This paper also summarized the influencing factors of platform brand value creation. The Internet has broken the boundaries of people’s lives, making the interaction among customers, and between customers and suppliers more frequent, the role of consumers has changed, and social resources have been widely shared. In the era of Internet, social support theory has also been applied to the business environment, and the ease of use of platform affects the participation of consumers. Based on the platforms, multilateral market players have emerged. These factors have all contributed to platform brand value co-creation. Finally, the research on the conceptual model of platform brand value co-creation is still at an exploratory stage, and there is still much room for expansion in the future. This paper proposed three future research directions: reconstruction of platform brand value; research on the micro-mechanism of platform brand value co-creation, as the behavior of prosumers will affect platform brand value; and empirical research on platform brand value co-creation.
Can venture capital shareholding relieve follow-up financing constraints on enterprises? Empirical evidence from Chinese listed enterprises
Business Management Journal,2018,Vol 40,No. 07
Financing constraint is a common problem in the development of enterprises. How to mitigate financing constraints is significant for improving corporate investment efficiency, reducing operating costs and promoting national economy. The main factors leading to financing constraints include information asymmetry and principal-agent conflict between companies and external investors. Scholars mainly seek ways to ease corporate financing constraints based on how to reduce the information asymmetry. Companies can actively report information related to investors’ decision-making and improve the quality of information disclosure to deepen outsiders’ understanding of the company. Market intermediaries building a communication bridge between the company and capital holders search for private data or disseminate the publicly disclosed information, which also help investors to make more accurately judgments on the firm value and further promote financing efficiency. However, the reduction of information asymmetry depends not only on the company’s initiative in disclosing and intermediary agencies’ disseminating information, but also on whether and to what extent the information is trusted by investors. In fact, enterprise insiders are motivated enough to hide or delay disclosure of bad news or even directly report false information in order to obtain lower-cost capital, but the possibility of this behavior being punished is very small in the context of imperfect legal systems. As long as outside investors are rational, they will surely realize that there is inconsistency between their own information sets and insiders. This makes capital holders refuse to fund enterprises or ask for higher returns as risk compensation, resulting in the issue of corporate financing constraints. This stalemate of information asymmetry will eventually lead to shrinking of capital markets, unless there is at least a third-party organization able to certify the value of companies. Venture capital firms happen to have this kind of authentication function. In addition to the role of certification, venture capital firms also proactively nurture companies in order to exit smoothly and obtain greater investment return. This will help improve companies’ operation and management, easing principal-agent conflict between internal controllers and external investors. Since venture capital firms can objectively verify the value of companies and subjectively have the motivation to provide supervision and value-added services, does the venture capital background help to alleviate financing constraints that restrict the growth of enterprises? To answer this question, this paper takes all A-share companies listed in Shanghai and Shenzhen Stock Exchanges from2007 to 2016 as a sample, empirically testing the mitigating effect, internal mechanism and influence path of venture capital on corporate financing constraints. The conclusion shows that venture capital helps to reduce the degree of financing constraints, and there are significant differences in alleviating the financing constraints between venture capitals with different characteristics. The mechanisms of venture capital’s impact on corporate financing behavior include two aspects. On one hand, venture capital firms not only objectively certify corporate value but also help companies to establish good cooperative relationships with market intermediaries, effectively alleviating the information asymmetric between external investors and enterprises. On the other hand, venture capital firms are actively involved in the management of post-investment which effectively defuses the principal-agent conflicts. After analyzing the influence path of venture capital on corporate finance, we find that venture capital helps enterprises to raise more capital for development in the capital market at a lower cost and overcome the unbalanced financing structure that is overly dependent on credit funds. In addition, venture capital firms also enhance the financing efficiency of enterprises in the equity market and the companies’ negotiation ability to value chain firms. The significance of this study is not only to enrich the literatures in the field of venture capital and financing constraints, but also help people deeply understand the interactive relationship between venture capital and corporate behavior.
Business Management Journal,2018,Vol 40,No. 07
In venture capital market, there is serious information asymmetry between venture capitalists and founders, so venture capitalists are facing more complex and variable risk investment factors. In the light of social identity theory, individuals are more likely to develop a good impression and preference for groups which are similar to their characteristics, since this can form identity and trust, and establish a long-term stable business relationship with each other. Relative to other social groups, schools are easier to cultivate the comparability degree among populations. When venture capitalists and founders have alumni connection, they can build trust through group recognition, enhance communication efficiency which reduce information asymmetry and transaction costs, and suppress the opportunism behavior between trading partners, thus having a significant impact on the venture capital transaction efficiency. From the view of trust between alumni, this paper investigates how alumni connections between venture capitalists and entrepreneurs affect venture capital transactions, based on sample of 613 venture capital events disclosed from the Small and Medium Enterprise Board and ChiNext in China during the period from 2004 to 2015. This research establishes the OLS and Logit regression model to give an empirical test for alumni effects of the investment time, direction and rounds. Empirical results suggest that when venture capitalists and founders have alumni connection, venture capitalists make earlier investment in the enterprise and are more likely to prefer to invest in high-tech enterprises and first round. Furthermore, the alumni effects become weaker when major and age differences become larger, and vice versa. Finally, the investment with the alumni connection will be fruitful, and investment time plays a role of some intermediaries at the impact on alumni connection to investment performance. After the elimination of the influence of such factors as social network activity, the reputation of the entrepreneur’s school, self-selection, the original results still stand. As the promoter of the innovation enterprise, venture capital’s core role is being highlighted in the process of economic growth and technical innovation. Venture capitalists play key roles in venture capital activities and are responsible for the final benefits. In those activities, both venture capitalists and entrepreneurs face serious information asymmetry and high uncertainty. It is the fact that to strengthen communication and cooperation is crucial to diminish transactions costs and investment risks. The conclusion of this paper indicates that alumni connections can help venture capitalists and founders build trust and provide stable psychological expectations in the course of transactions. In this case, venture capitalists can take higher investment risks, and help venture capital to play a more active role in promoting innovation and entrepreneurship. Especially China is in economic transition period, so there are still a lot of problems in the legislation that need to be resolved. There are short of marketing informatization of enterprise management condition. Due to the lack of legal system to ensure working with founders, this increases the risk of investment by venture capitalists. As a result, it is extremely more urgent to establish and improve system of credit. Under the circumstances, relationship network such as alumni connections will be helpful for strengthening mutual understanding and trust between entrepreneurs and venture capitalists. So, it is of great significance for venture capitalists to socialize, communicate and trade with entrepreneurs. The main novel contributions of this paper are as follow. The trust formed by alumni is an exogenous variable on the venture capital event that can be used to study the influence in the investment process of venture capitalists, and help to clearly reveal venture capital investment preferences and the formation of investment results. What is more, this research is additional to the theory for the role of social relations, find out that social relations have positive effects on the market of venture capital investment, and help to better understand the rules of venture capital activity, and enrich the basic theory of venture capital.
More leisure, more passion: research of the influencing mechanism of leisure participation on knowledge workers’ working passion
Business Management Journal,2018,Vol 40,No. 07
In the knowledge economy society, knowledge workers have become the backbone of creating enterprise high performance, so managers expect them to inspire continuous working passion, and to invest themselves fully into work. However, the reality makes people upset. The low staff morale, lack of passion and go-slow are some realistic problems plaguing many enterprises. Inspiring working passion can help employees out of the job dilemma, regain the confidence in their own work and produce the best results, but the existing study has not focused on the formation mechanism of working passion. The study tries to explore a new path of awaking and maintaining the passion of knowledge workers from the perspective of leisure, so as to promote the transformation of knowledge potential into realistic performance, which is based on the staffs’ desire for leisure and the enlightenment of infinite vacation policy. The recovery experience is not only the key psychological process to ensure the normal transformation of employees in the work-nonwork life, but also one of the results of leisure participation. Thus, is the recovery experience an essential element of the link between leisure participation and working passion? In addition, the role of organizational factors cannot be ignored, and how the different types and intensity of the knowledge workers’ organizational attachment will affect the process of individual continuous working passion? It is urgently needed to explore and answer these questions. The study reviews the relevant theoretical literature of leisure participation, recovery experience, organizational attachment and working passion. Based on the theory of work-nonwork spillover, resource conservation theory and social cognition of working passion, the authors build a model to explore the influencing mechanism of leisure participation on knowledge workers’ working passion. The study tries to explore the following points. (1) Does the knowledge workers’ leisure participation have an impact on their working passion? What is the impact? (2) Whether the recovery experience plays a mediating role in the relationship between knowledge workers’ leisure participation and working passion? (3) Is there a moderating effect of different types of organizational attachment on the relationship between leisure participation and working passion? Is there positive or negative adjustment? (4) If there is a mediating effect, then whether the different types of organizational attachment have a moderating effect on the mediating effect? How does it affect? Based on the established model, this paper carried out questionnaire design and investigation, and collected 586 valid questionnaires for knowledge workers. On the basis of ensuring the reliability and validity of scale, this paper examined the hypothesis. The empirical results show the following points. (1) The relationship between leisure participation and knowledge workers’ working passion is inverted U-shaped curve. (2) The recovery experience has a mediating effect on the relationship between leisure participation and working passion. Leisure participation affects the recovery experience through the inverted U-shaped curve effect, thus affecting the passion of knowledge workers, contributed to the inverted U-shaped relationship between leisure participation and working passion. (3) The relationship between the leisure participation of the knowledge workers and the passion for work is moderated negatively by the non-safety organizational attachment (avoidance type of organizational attachment and anxiety type of organizational attachment). (4) The mediating effect is moderated negatively by the non-safety organizational attachment, but there is no moderating effect of the safety organizational attachment on the mediating relationship. Based on the above conclusions, this study puts forward some suggestions from the national, organizational, individual level.