Organizational Forms and Multi-population Dynamics : Economic Transition in China

To examine the transition from a planned to a market economy in China, this study uses census data from China's National Bureau of Statistics from 1998-2006 to investigate multi-population dynamics across the three main organizational forms in China's domestic sector: state-owned enterprises (SOEs), collectively owned enterprises (COEs), and privately owned enterprises (POEs). We conceptualize economic transition as a community-level change from an old, dominant organizational form (SOE), through a transitional form (COE), to a new form (POE). When the new organizational form conflicts with the prevailing identity codes represented by the old form, the transitional form-which has identity overlap with both the new and old forms-performs the critical tasks of transferring legitimacy to the new form and supporting its survival and proliferation. Our analysis showed that, though the existence of state-owned enterprises increased the exit rate of privately owned enterprises, collectively owned enterprises provided legitimation for privately owned enterprises. Meanwhile, privately owned enterprises crowded out both state-owned enterprises and collectively owned enterprises. We contribute to ecology theory by extending research that typically depicts a two-population scenario. Our framework accommodates cross-effects involving three organizational forms: old, transitional, and new.