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Institutional analysis of the Enforcement of Law of PRC on promotion of Small and Medium Enterprises

Xu, Yufeng (2009)
Department of Economics
Abstract
Small- and Medium-sized enterprises (SMEs) contributed a lot to the economic growth and promote employment in China. However, they were suffering from the credit discrimination, insecure property right protection, lack of the industry support policy and social services the same time. Based on this general background, in 2003, the Law of the PRC on promotion of Small and Medium-sized Enterprises (SMEs law) was released, in order to strengthen the business environment of SMEs. Nevertheless, the discussion recently emerged that this law didn’t have any effect, since the enforcement remains problematic. This thesis will focus on the new institutional economic theory with a special focus on law enforcement. Furthermore it will provide evidences... (More)
Small- and Medium-sized enterprises (SMEs) contributed a lot to the economic growth and promote employment in China. However, they were suffering from the credit discrimination, insecure property right protection, lack of the industry support policy and social services the same time. Based on this general background, in 2003, the Law of the PRC on promotion of Small and Medium-sized Enterprises (SMEs law) was released, in order to strengthen the business environment of SMEs. Nevertheless, the discussion recently emerged that this law didn’t have any effect, since the enforcement remains problematic. This thesis will focus on the new institutional economic theory with a special focus on law enforcement. Furthermore it will provide evidences from fieldwork in Qingdao and Harbin in April and May 2009.
This paper uses a comprehensive institution analysis method to specify this problem. Based on the new institutional economics, several contributing factors determining the legal enforcement will be discussed: the coordinators problem and local fiscal problems, the path dependence of the old informal norms, and the further analysis of the SMEs law and the collision of different departments inside government. Depending on these dimensions, a case-study were carried out in China would check enforcement of the SMEs law in reality by different chapters the SMEs law ordered. The overall implications of these results are far less explicit given the limited scope of the case study. However, the results do indicate further and more thorough research is warranted, especially considering China’s role in the global business stage. (Less)
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@misc{1644304,
  abstract     = {Small- and Medium-sized enterprises (SMEs) contributed a lot to the economic growth and promote employment in China. However, they were suffering from the credit discrimination, insecure property right protection, lack of the industry support policy and social services the same time. Based on this general background, in 2003, the Law of the PRC on promotion of Small and Medium-sized Enterprises (SMEs law) was released, in order to strengthen the business environment of SMEs. Nevertheless, the discussion recently emerged that this law didn’t have any effect, since the enforcement remains problematic. This thesis will focus on the new institutional economic theory with a special focus on law enforcement. Furthermore it will provide evidences from fieldwork in Qingdao and Harbin in April and May 2009.
This paper uses a comprehensive institution analysis method to specify this problem. Based on the new institutional economics, several contributing factors determining the legal enforcement will be discussed: the coordinators problem and local fiscal problems, the path dependence of the old informal norms, and the further analysis of the SMEs law and the collision of different departments inside government. Depending on these dimensions, a case-study were carried out in China would check enforcement of the SMEs law in reality by different chapters the SMEs law ordered. The overall implications of these results are far less explicit given the limited scope of the case study. However, the results do indicate further and more thorough research is warranted, especially considering China’s role in the global business stage.},
  author       = {Xu, Yufeng},
  keyword      = {China,new institutional economics,Small- and Medium-Sized enterprises (SMEs),Law of the PRC on promotion of Small and Medium-sized Enterprises (SMEs law),Enforcement,Economics, econometrics, economic theory, economic systems, economic policy,Nationalekonomi, ekonometri, ekonomisk teori, ekonomiska system, ekonomisk politik},
  language     = {eng},
  note         = {Student Paper},
  title        = {Institutional analysis of the Enforcement of Law of PRC on promotion of Small and Medium Enterprises},
  year         = {2009},
}