Decentralization, Rent-seeking and Corporate Performance

Abstract

By 2010--2013 years of experience in China A-share listed companies, we found rent-seeking behavior of enterprises has had two major effects: creative production inhibitory effect and relational resources favoritism effect. The former hinders the improvement of enterprise performance, while the latter promote the upgrading of performance. Overall, the former positive effect on corporate performance is more than the latter negative effect on corporate performance. Further decentralization, strengthening social management to enhance the level of public services is fundamentally reducing rent-seeking phenomenon, and improving enterprise performance.