SUCCESS IN CHINA INDUSTRIAL MARKET - AN INSTITUTIONAL AND ENVIRONMENTAL APPROACH

During China's rapid transition from a planned to a market economy, a major issue that has not been adequately addressed is ''What determine s a firm's performance?'' This study proposes an institutional and env ironmental approach to evaluate how a firm performs in this dynamic tr ansitional economy. Using a data set containing China's entire industr ial market, this study finds that a firm's performance is shaped by it s institutional characteristics and its environment, along with other strategic factors such as its market share. A surprising and yet impor tant finding is the superior performance of the so-called ''collective ly owned'' enterprises. The article not only explores the theoretical relationship between firm performance and institutional and environmen tal factors in transitional economies, but also is helpful for manager s in developing such marketing strategies as market assessment, entry strategy, or partner selection.