Business strategy and ownership structure of Chinese firms

Abstract

Business strategy and ownership structure are important determinants of the competitive advantage of firms in market economies. The Chinese firms have experienced dramatic changes related to these two issues. A combination of case studies in this paper serves to identify the specific behavior of Chinese firms that operate in a transitional society undergoing social and economic transformation. The behavior of Chinese firms reflects the coexistence of both market-based and politically-oriented factors. The study also shows that a specific ownership structure is associated with the business strategies employed. The interaction between business strategy and ownership structure helps explain the process of the development of the Chinese firms within China's context.