Stefan Brehm

Homophily in the Career mobility of China's Political Elite

We argue that leadership promotion in Chinas political elite relies on homophily for signals of trustworthiness and future cooperative behavior more than on economic performance. We first point to the limitation of the economic performance argument from within the framework of Chinas specific M-form state structure, and then we proffer a sociological explanation for why higher-level elites in China rely on homophilous associations in recruiting middle-level elites to the top positions of state. Using a unique dataset covering Chinas provincial leaders from 1979 to 2011, we develop a homophily index focusing on joint origin, joint education and joint work experience. We trace personal similarities in these respects between provincial leaders and members of Chinas supreme decision-making body, the Politbureaus Standing Committee. We then provide robust evidence confirming the persisting impact of homophilous associations on promotion patterns in post-reform China.

Risk Management in China's State Banks - International Best Practice and the Political Economy of Regulation

The modernization of the banking sector, and particularly the big four state owned commercial banks, has a top priority on the Chinese reform agenda. Three of the four state banks found foreign strategic investors as minority shareholders and domestic banks now face more competition from global players since the countrys WTO commitments came fully into effect at the end of 2006. A comprehensive approach to reform aims at pushing Chinas state banks into the league of global leading financial institutions within a few years time. But is this aim feasible despite prevalent state dominance? To shed light on the role and impact of the state in promoting sound risk management practices this paper focuses on the political economy of law implementation. Two main conclusions are drawn: (1) the direction of action is significantly different from reform outcomes due to weak incentives to enforce respective policies and as a consequence non-performing loan accumulation continues; and (2) on a more general level banking regulation in China illustrates that a normative approach based on international best practice is insufficient to address the issue of financial stability in many emerging and developing countries because it neglects the role of the institutional embeddedness of banking reform.

University--industry linkages and absorptive capacity: an empirical analysis of China's manufacturing industry

We analyze the contribution of universities to innovative performance in Chinas manufacturing sector. Our empirical analysis is based on a matched data set comprising about 20,000 large- and medium-sized companies aggregated at the three-digit industry level and information on university knowledge output for 31 provinces between 1998 and 2004. We show that universities’ impact on commercial innovation varies with the type of activity performed and is contingent on the manufacturing sectors investment in absorptive capacity. In addition, our results confirm organizational theory stating that there is a complementary relationship between capabilities to acquire and assimilate external knowledge on the one hand and the capacity to transform and exploit this knowledge on the other.

Are Model Cities an Effective Instrument for Urban Environmental Governance

Since the 1980s, China’s central government has created various model and incentive schemes aimed at systematically and concurrently promoting innovative approaches for protecting the urban ecological environment. In this context, programmes such as the ‘model city for protecting the environment’, ‘garden city’, ‘eco-city’, or ‘low-carbon city’ have become an integral part of China’s system for urban environmental governance. However, the role of these policy-incentive schemes for promoting best practice is only partly understood. This chapter contributes to the literature with a conceptualization of model cities as a dynamic governance instrument. The analysis suggests that the distance between programme objectives and local practices increases with programme maturity. Model-city schemes inevitably reach a point of saturation once a competing programme provides new opportunities to gain political and economic rents.