By Derong Chen (auth.)
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Extra resources for Chinese Firms between Hierarchy and Market: The Contract Management Responsibility System in China
Furthermore, the latter case entails more fundamental changes in which economic development is closely linked to institutional change. Thus institutional analysis is even more relevant. The next chapter is about how to apply the institutional approach to the research presented in this book. 3 Research Design The research design aims at solving two problems: first, to build up a theoretical framework for investigation of the CMRS and, second, to choose a scientific approach to conduct the investigation.
In this research, it is rather difficult to answer the three main questions by conducting a quantitative survey, because key variables and general relationships need to emerge through grounded research rather than to be pre-determined in a questionnaire. Although some studies have been done in the past, these are rather fragmented and do not offer a clear framework for a quantitative survey. Since the CMRS is a new institutional arrangement to deal with a critical link between micro and macro levels, it involves many fundamental issues in the economic transition.
North further points out that the total costs of production consist of transforming costs that are the resource inputs of land, labour and capital involved in transforming the physical attributes of a good, such as size, weight, colour, location, chemical composition, and transacting costs that are defining, protecting and enforcing the property rights to goods (the right to use, the right to derive from the use of, the right to exclude and the right to exchange). The reason for the costliness of transacting is the costs of measurement and enforcement.