Large firms and catch-up in a transitional economy: the case of Shougang Group in China

Nolan, P and Yeung, Godfrey (2001) Large firms and catch-up in a transitional economy: the case of Shougang Group in China. Economics of Planning, 34 (01-02). pp. 159-178. ISSN 0013-0451

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This study examines the possibility of catch-up of the Chinese steel industry, in particular the Shougang Group, with the leading global steel giants. Shougang is one of the four steel companies that have been selected by the Chinese government to constitute the core of the future Chinese steel industry. The contract system at Shougang, which operated from 1979 to 1995, unleashed an extraordinary entrepreneurial energy in the formerly traditional state-run steel plant. In the post-contract system, Shougang's range of decision-making independence in respect to the purchase of inputs, its production structure and product marketing has increased substantially compared to the contract system, when the government still controlled many of the key decisions. As a result of institutional constraint, the low value-added steel products dominate Shougang's portfolio. To challenge the established giants in the steel industry, Shougang has to divest the loss-making non-core businesses, slowly downsize employment in the core business, raise capital on the stock market and generates the resources for continued upgrading of its steel technology and diversifying its product portfolio.

Item Type: Article
Keywords: China, Gloablisation and catch-up, Iron and steel industry, State-owned enterprise reform
Schools and Departments: School of Global Studies > Geography
School of Law, Politics and Sociology > Sociology
Subjects: H Social Sciences > HD Industries. Land use. Labour > HD0028 Management. Industrial Management
H Social Sciences > H Social Sciences (General)
Depositing User: Godfrey Yeung
Date Deposited: 19 Sep 2006
Last Modified: 07 Oct 2019 11:15
Google Scholar:11 Citations

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