The Oxford Handbook of State Capitalism and The Firm
Oxford University Press
Dedicated to Mike Wright (1952 – 2019)
- Mike Wright (Imperial College London, UK)
- Geoffrey T. Wood (Western University, Canada)
- Alvaro Cuervo-Cazurra (Northeastern University, USA)
- Pei Sun (University of Manchester, UK)
- Ilya Okhmatovskiy (Universidade Nova de Lisboa, Portugal)
- Anna Grosman (Loughborough University, UK)
This handbook presents the latest theoretical and applied thinking on state capitalism, i.e., the institutional, policy, and ownership arrangements that reflect the direct influence of the state on the economy and firm behaviour. It is a timely volume given the worldwide changes regarding the role of the state in the economy. Starting in the 1980s, there was an apparent process of retrenchment from earlier statism that had dominated most world economies since the 1940s, with state-owned enterprises becoming partially and fully privatized, industries becoming deregulated, and economies becoming liberalized by governments. However, in the 2010s the process saw a reversal, both in advanced economies (with governments regulating industries and nationalizing banks and firms to deal with the aftermath of the Great Recession that started in 2008) and in emerging economies (with governments using domestic firms as extensions of economic policy and supporting the international expansion of state-owned firms). This trend has resulted in new and more complex realities of the influence of the governments on firms. For example, governments share ownership with private investors, state-owned firms have become multinationals, governments have taken on new roles as global asset managers (e.g., through sovereign wealth funds) and there has been a rise of firms that have secured oligopolistic status through state concessions and by capturing outsourced public functions. These shifts can be seen as reflecting a long historical dynamic in which countries move to and away from laissez-faire marketization at one end of the spectrum and close state involvement in firms (statism) at the other end. The inability of unregulated marketization to ensure stability and broad-based growth has led to suggestions that this movement back to statism is predictable, and indeed, somewhat overdue, even if, the forms it assumes are not always benign.
The volume explores the processes through which state capitalism has emerged and is sustained, and what sets new state capitalism apart from the old. We argue that, here, a core distinction is between traditional models of nationalised or state-owned enterprises, and the greater variety of forms assumed in the contemporary age. This would include state-owned enterprises that have undergone reforms to place them on a more market-orientated footing, partially, but not completely privatised enterprises, private companies that have received government investment and work to serve the diplomatic goals of their country of origin government, and politically connected private firms which occupy a space between state and market. The latter rely on the state for contracts and support, typically occupy oligopolistic market positions, and secure private profits through government backing.
This Handbook demonstrates how state capitalism may be understood from a range of different disciplinary perspectives including political economy, economics, finance, public administration, sociology, and law. It includes chapters that explore institutions and institutional arrangements that sustain state capitalism including formal policies, informal patronage, and network ties. We pay special attention to state-affiliated multinational enterprises that may represent an arm of their country of origin governments but also may have close ties to governments of host countries. Several chapters are focused on the state as an investor operating through state-owned banks, sovereign wealth funds, and other financial agents. Finally, we demonstrate how state capitalism manifests itself around the world.
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