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Large firms and catch-up in a transitional economy: the case of Shougang Group in China
journal contribution
posted on 2023-06-07, 04:43 authored by P Nolan, Godfrey YeungThis 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.
History
Publication status
- Published
Journal
Economics of PlanningISSN
0013-0451Publisher
Springer VerlagExternal DOI
Issue
01-02Volume
34Page range
159-178Department affiliated with
- Geography Publications
Full text available
- Yes
Peer reviewed?
- Yes