Governing Stock Markets in Transition Economies: Lessons from China
Year: 2005
Type: article
Abstract: Jump-starting stock markets in transition economies has proved difficult. These countries lack effective legal governance structures and face severe information problems. Yet not all financial markets failed because of adverse conditions. Using China’s initial stock market development as a case study, this article suggests that administrative governance can substitute for formal legal governance. At the core of this governance structure was the quota system. It created incentives for regional competition and decentralized information collection at the IPO stage. It was also used to punish regions and responsible officials when companies from their regions failed, as evidenced herein.
DOI: 10.1093/aler/ahi008
Authors: Katharina Pistor, Chenggang Xu
Institutions: Columbia University, University of Hong Kong
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2121797095