Review by Choice Review
Despite an inefficient financial system and lack of well-functioning market institutions, China has been able to create many vibrant high-tech firms over the last 15 years. Fuller (Zhejiang Univ.) explains why and how some of the Chinese high-tech firms are learning to innovate. He argues that the state-owned companies and "state-favored" private enterprises are technological paper tigers. They have no incentive to upgrade their technological capability. This is the result of the inappropriate government policy of providing these firms with generous subsidies and protecting them from market discipline and bankruptcy. On the other hand, the author believes that hybrid firms, representing a combination of ethnic Chinese management and foreign-invested firms, are the hidden dragons producing the recent technological development in China. Unlike state-owned firms, hybrid firms are forced to raise money from foreign sources. Foreign venture capitalists and regulators demand market discipline and good governance. Therefore, these hybrid firms have to compete at the level of top international firms. It is possible that the hybrid-led development has implications for new alternative economic development models for other developing countries beyond China. Summing Up: Highly recommended. Upper-division undergraduates through faculty. --Reza M. Ramazani, Saint Michael's College
Copyright American Library Association, used with permission.
Review by Choice Review
