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Institutional logic of industry associations

Author: SunLiJun
Tutor: JiangXueMo
School: Fudan University
Course: Political Economics
Keywords: ProfessionalAssociation Governance Mechanism Transition Economy
CLC: F203
Type: PhD thesis
Year: 2004
Downloads: 2148
Quote: 16
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Abstract


As a kind of the self-regulative professional organization, the origin ofProfessional Association can be tracked back to Craft Gild and Merchant Gild inancient Greece and Europe in Middle Ages from this point on, ProfessionalAssociation is an economic system older than the enterprise. The theory about whythe enterprise exists from Coase has been a milestone in the development ofeconomics, but there are little discuss about why Professional Association exists. Thisdissertation attempts to present an overview of the existence and development and theelemental function of Professional Association. Employing the transaction cost theoryand the analytic tool of Game theory,based on the question of why the professionalassociation exists, it designs a theoretical framework to explain the inner and externalmechanism of Professional Association, and puts up a positive investigation on theinner and external mechanism of Chinese professional association. Based on the definition of Professional Association’s essential connotation onself-regulative, civil, nonprofit and mutually beneficial etc, this dissertation maintains: At all times and in all over the world, Merchant Gild, Craft Gild, Trade Company,Vocational Association and Chamber of Commerce all are the incorporate forms ofProfessional Association ,they have the essential connotation enumerated above. From the outer mechanism of Professional Association: Professional Associationcomes into being driven by the market organization (the enterprise) and thegovernment. The market organization engenders transaction cost because of itsexternalities; the government brings transaction cost because of its internalities. As aneconomic organization between the market organization and the government, becauseProfessional Association not only has some characters of the market organization, butalso has some traits of the government, can reduce the gross transaction cost whensupplying products or service. Market Failures and Government Failures areunvarying, so Professional Association occurs and coexists with commodity economy,and is mutually complementary with the government governance. From the inner mechanism of Professional Association: ProfessionalAssociation’s advantages of transaction cost in supplying information, coordinatingactivities, engendering credit and formulating regulations, are the social validity ofProfessional Association’s existence. Being the private governance mechanism fromthe third party, Professional Association can gather and spread information, evaluatecredit and distinguish request, furthermore it can choose the action beneficial to the 3<WP=9>market of one’s own accord authoritatively, indicated by its game model of neutralattachment and that of strategic attachment. It is made clear by the correlative gamemodel of Professional Association that it can gain the trust from member enterprisesand avoid the principle-agent problem. Professional Association’s disadvantages oftransaction cost focus on its anti-competitive behavior, which is its native tendency.Professional Association’s anti-competitive behavior can be restricted by cultivatingmarket economy and constituting correlative law. During the period of the Chinese transition economy, the professionalassociations of China come into being promoted by the development of thecommodity economy and the conversion of government function. The method ofengendering Professional Association coming forth “from up to down”promoted bythe government is prominent, but it is only a transitional step. At present, theprofessional association of China has basically taken its shape, but there are still manyconstraints on the governmental administration, personnel engaged in and the sourceof outlay, It is the direction to which Professional Association develop that the unitaryadministration mode of government, the method of engendering ProfessionalAssociation coming fo

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CLC: > Economic > Economic planning and management > Management of National Economy > Production industry management
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