Corporate Governance in China - is Economic Growth Potential Hindered by Guanxi?

16 Pages Posted: 28 Apr 2005

See all articles by Udo C. Braendle

Udo C. Braendle

American University in Dubai

Tanja Gasser

University of Vienna

Juergen Noll

University of Vienna - Department for Business Studies

Multiple version iconThere are 2 versions of this paper

Date Written: April 25, 2005

Abstract

Despite the opening of the market and partly privatisation of state-owned companies in China, the state still represents the controlling shareholder in larger companies. By analysing the weaknesses of Chinese corporate governance we illustrate the framework for harmful corruption. China is characterised by a weak legal system and strong influences of traditions such as guanxi. In this article we analyse the influence of guanxi on the Chinese corporate governance system. We find that guanxi is in general a double-edged sword but especially business-to-government guanxi can harm the weak Chinese corporate governance system and hamper its further economic development and growth.

Keywords: Corporate Governance, China, Transition, Law, Corruption, Guanxi

JEL Classification: G34, K42, N45, P31

Suggested Citation

Braendle, Udo C. and Gasser, Tanja and Noll, Juergen, Corporate Governance in China - is Economic Growth Potential Hindered by Guanxi? (April 25, 2005). Available at SSRN: https://ssrn.com/abstract=710203 or http://dx.doi.org/10.2139/ssrn.710203

Udo C. Braendle (Contact Author)

American University in Dubai ( email )

Dubai, UAE 28282
United Arab Emirates

Tanja Gasser

University of Vienna ( email )

Bruenner Strasse 72
Vienna 1210, Vienna
Austria

Juergen Noll

University of Vienna - Department for Business Studies ( email )

Bruenner Strasse 72
Vienna, A1210
Austria
+43 1 42 77 38 105 (Phone)
+43 1 42 77 38 104 (Fax)

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