This paper uses a Nash bargaining framework to model the causes of the partial reform equilibrium syndrome that characterizes China's state sector. The model demonstrates the nature of the bargain between the principals (i.e., officials from China's State Asset Council) and the agents (large-SOE...

This paper proposes a theoretical framework to illustrate the incentives of the exponential growth of the asset size of China's large state-owned enterprises in the past decades. We come up with the views that there are 3 types of incentives that lead to the expansion of asset size of large SOEs...

This paper constructs a simple model to reveal the trade-off between decentralized and centralized governance structure of large state-owned enterprises (SOEs) in China. Our model shows that the delegation of decision making authority to SOE managers would enhance their initiative in terms of...