The Economics of Transition: From Socialist Economy to Market Economy.

Myant, Martin; Lavigne, Marie; Chavance, Bernard

doi:10.2307/2235538

Cited by 7 publications

(7 citation statements)

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“…To conduct business in a transitional environment, they normally establish joint ventures with local private firms initially and then gradually shift to wholly foreign-owned enterprises (Lavigne, 1999). The competing relationship between the state sector and the private sector is re-emphasized with their significant and positive pairwise interaction: the prominence of SOEs erodes the proliferation of POEs, subsequently leading to their exit from the market.…”

Section: Organizational Forms and Firm Exitmentioning

confidence: 99%

Successful transition to a market economy: an interpretation from organizational ecology theory and institutional theory

Tran

Santarelli

2020

Industrial and Corporate Change

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This article investigates the rationales for the successful economic transition in a transition country through the lens of organizational ecology theory and institutional theory. Initially, the new private sector emerges and survives because of “legitimacy spillovers” from the legitimized transitional mixed sector and some market-oriented identity overlap. Over time, as the private sector builds its own legitimacy, it competes with the state and the mixed sector and challenges their existence. Finally, the Schumpeterian “creative destruction” process replaces the old out-of-date sectors with the new dominant sector. Consistent with organizational ecology theory, the evolution and dynamics of the three economic sectors take place through their interactions, which determine the emergence, prominence, decline, and exit of firm populations in each sector. Depending on whether a centrally planned or market-oriented political legacy plays the dominant role in the regional environment where the transition takes place, local institutions play a moderating role in stimulating or hindering this evolution process. Empirically, we test this mechanism using census data for firms operating in Vietnam between 2000 and 2013, applying Blundell and Bond’s generalized method of moments (GMM) estimation technique and the piecewise exponential hazard model to study the interaction effects of economic sectors in terms of profitability and survival.

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Section: Organizational Forms and Firm Exitmentioning

confidence: 99%

Successful transition to a market economy: an interpretation from organizational ecology theory and institutional theory

Tran

Santarelli

2020

Industrial and Corporate Change

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“…In emerging economies, governments switched from an import substitution model of development (Bruton, 1998) to an export‐led model and were advised by international institutions such as the World Bank and International Monetary Fund to sell their participation in large segments of the economy and become facilitators of development (Rodrik, 2006). In transition economies, governments changed their objectives from being the sole engines of development under the logic of communism to becoming enablers of development under capitalism, selling companies to insiders or in the capital markets (Lavigne, 1999). The outcome of these privatization processes was a large reduction in the number and diversity of state‐owned firms in state‐owned business groups, reducing their diversification significantly.…”

Section: Pro‐market Reforms and Business Groups Evolutionmentioning

confidence: 99%

Owners' nonfinancial objectives and the diversification and internationalization of business groups

Cuervo-Cazurra

Colpan

2023

Corporate Governance

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Research Question/IssueStudies on business groups, a collection of legally separate firms operating in unrelated industries under common control, tend to compare the behavior of firms affiliated with business groups and firms that are independent companies. Unfortunately, this ignores the diversity among business groups based on their controlling owner. Hence, in this conceptual article, we study how the types of controlling owners impact the diversification and internationalization of business groups.Research Findings/InsightsBuilding on agency theory, we separate business groups into five types based on their ultimate controlling owners (state, labor, family, mutual, and bank) and identify their nonfinancial objectives. We argue that their nonfinancial objectives result in diverging levels of diversification and internationalization of business groups across owner types. Specifically, we propose that state‐owned and bank‐owned business groups have a relatively high level of diversification, labor‐owned and mutual‐owned business groups have a relatively moderate level, and family‐owned business groups have a relatively low level. We also argue that state‐owned and labor‐owned business groups have a relatively low level of internationalization, family‐owned business groups have a relatively moderate level, and mutual‐owned and bank‐owned business groups have a relatively high level. We add depth to these ideas by proposing that pro‐market reforms alter owners' ability to achieve their nonfinancial objectives, leading to diverging changes in business groups' diversification and internationalization across owner types. Specifically, we propose that following pro‐market reforms, state‐owned and bank‐owned business groups experience a large decrease in their level of diversification, labor‐owned and mutual‐owned business groups see a moderate decrease, and family‐owned business groups have a small decrease. We also argue that pro‐market reforms lead state‐owned and labor‐owned business groups to have a small increase in their level of internationalization, family‐owned a moderate increase, and mutual‐owned and bank‐owned to experience a large increase.Theoretical/Academic ImplicationsTo the business groups literature, we highlight the importance of controlling owners and their nonfinancial objectives as the drivers of business group diversification and internationalization, complementing the usual focus on market imperfections. To agency theory, we highlight the diversity of owners' nonfinancial objectives and explain how these affect strategy, complementing the traditional focus on differences in objectives between owners and professional managers driving strategy.Practitioner/Policy ImplicationsManagers can defend decisions based on the often‐unstated nonfinancial objectives of the controlling owners, countering external investors' criticisms of managers misbehaving by not aiming to maximize profits.

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“…For Vietnam, the concept still consists of two constituent elements, but we must pay special attention to an important supplement: the "orientation." This supplement seems to clarify the relationship between "socialist" and "market economy" more than the concept in the neighboring country (LAVIGNE, 1999;EGLINGER, JEAN-PHILIPPE, 2021). The Chinese concept seeks to establish a "market economy" based on "socialism."…”

Section: Overview Of the Concept Of A "Socialist-oriented Market Econ...mentioning

confidence: 99%

socialist-oriented market economy in Vietnam

Đức

Thang

Que

2023

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This paper reviews the legal aspect of the formed and changing perceptions of the Communist Party of Vietnam on the socialist-oriented market economy (SME). The authors assess the reflection of that awareness in the 2013 Constitution and the practical implementation of Vietnam’s participation in recent free trade agreements. We find there have been important changes in perceptions related to the SME before the enactment of the 2013 Constitution. However, the reflection of awareness about that policy in the 2013 Constitution is not enough and has caused several challenges to its enforcement, especially regarding the legal system and global economic integration. The authors here also point out conflicts between the policy of building a SME in Vietnam with the requirements of free trade in terms of theory and recent practical agreements, raising questions of whether those conflicts could be acceptable and how to address them.

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The Economics of Transition: From Socialist Economy to Market Economy.

Cited by 7 publications

References 0 publications

Successful transition to a market economy: an interpretation from organizational ecology theory and institutional theory

Successful transition to a market economy: an interpretation from organizational ecology theory and institutional theory

Owners' nonfinancial objectives and the diversification and internationalization of business groups

socialist-oriented market economy in Vietnam

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