Conflict Resolution Strategies of Chinese Private Entrepreneurs: The Role of Political Participation

Title: Conflict Resolution Strategies of Chinese Private Entrepreneurs: The Role of Political

Participation

Authors:

Wang, Guofeng; Univ. of Electronic Science and Technology of China

Friedman, Ray; Vanderbilt University

Kim, Tae-Hyun; Northwestern University

Jing, Runtian; Univ. of Electronic Science and Technology of China

Presented at the

22nd Annual International Association of Conflict Management Conference

Kyoto, Japan

June 15 – 18, 2009

Abstract: This study investigated the link between private entrepreneurs’ political networking

and organizational strategies for conflict management in China. We predicted, and found, that

those with political influence were more likely to use a “rights” approach to resolve inter-

organizational disputes (i.e., going to court), while those without political influence were more

likely to use an “interests” approach (i.e., mediation and negotiation). There were no differences

between those with and without political influence in use of “power” (i.e., going directly to

government agencies). These findings are based on a survey of 4149 private Chinese

entrepreneurs in 1995, 1997, and 2000.

Conflict Resolution Strategies of Chinese Private Entrepreneurs: The Role of Political Participation

Conflict Resolution Strategies of Chinese Private Entrepreneurs: The Role of

Political Participation

This study investigated the link between private entrepreneurs’ political networking

and organizational strategies for conflict management in China. We predicted, and

found, that those with political influence were more likely to use a “rights” approach to

resolve inter-organizational disputes (i.e., going to court), while those without political

influence were more likely to use an “interests” approach (i.e., mediation and

negotiation). There were no differences between those with and without political

influence in use of “power” (i.e., going directly to government agencies). These

findings are based on a survey of 4149 private Chinese entrepreneurs in 1995, 1997,

and 2000.

Key words: Conflict management, Political participation, and Chinese private

entrepreneurs

1


INTRODUCTION

Conflict seems inevitable in or between organizations. Existing conflict

management studies have mainly focused on three key themes: workplace conflict

and conflict management styles, cultural differences in conflict management, and

conflict management in practice (Ma, Lee, & Yu, 2008) in the context of interpersonal

conflict or intra- or inter-group conflict among workers, work groups, or project

groups. Although these studies shed light on how psychological processes

contributes to conflict escalation or resolution of conflict, few studies have examined

inter-organizational conflict and how it is managed which might have a significant

effect on organizational success or even survival. We are particularly interested in

conflict management in a transitional economy. In such an economy like China,

informal relationships, such as organization’s association with powerful politicians,

might play an important role in the conflict resolution process.

In China, private businesses (including foreign firms) contributed 65 percent of

the nation's GDP in 2006 and up to 80 percent of the nation's economic growth (Liu &

Tong, 2008). During the 2000-2006 period, the number of private enterprises in China

increased from 1.76 million to 4.98 million1 and the growth rate of the private sector

has far outpaced that of the public sector since its revival (Li, Meng, & Zhang, 2006).

Although a private sector has been a primary engine of growth in Chinese economy, it

has drawn relatively little attention in academic research. For example, Tsui et al.

(2004) showed that less than 10 percent of articles on Chinese management or

2

1 Report on China’s SMEs Development for 2007, Department of SME under National Development and Reform Commission.


organizations published in 20 international journals from 1984 to 2003 were about

private sector firms. As the number of private firms continues to grow, and

competition among them becomes much fierce, it is natural to expect more conflicts.

For example, it is reported that Chinese and foreign enterprises are often engaged in

inter-organizational conflict due to a failure to agree on issues such as intellectual

property rights, or trade and human resource decisions (Jiang, 2008). Understanding

how these conflicts play out is critical both for the Chinese economy and for

international corporations. And in a transitional economy like China, where formal

institutions are not built perfectly, connections (guanxi) may be as substitutes for

formal institutional support (Xin & Pearce, 1996). In most previous research,

Chinese private enterprises have been treated as homogeneous entities. However,

some may be in a much stronger position politically, due to the membership of owners

in Chinese political institutions.

In this paper, using Chinese data from private enterprises, we examine how

entrepreneurs’ political participation affects a way that private enterprises handle

conflict between private enterprises and other private interest groups such as suppliers,

buyers, and customers. We examine which conflict resolution strategies they prefer to

use and if changes in regulations over time affect the choices of dispute resolution

strategies.

The structure of this article is as follows: first, Ury, Brett, and Goldberg (1988)’s

three approaches to resolving disputes are introduced, and several hypotheses

pertaining to effect of political power on the choices of these approaches by Chinese

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private entrepreneurs are proposed. Then, data and measures are described, followed

by the analysis results. The final section makes conclusions and discusses the

implications of findings.

THEORY AND HYPOTHESES

Power, Rights, and Interests

Ury, Brett, and Goldberg (1988) argue that, disputants can adopt different

approaches to settle disputes based on their different focuses, i.e., interests, rights, or

power. When disputants focus on interests, they attempt to understand mutual

underlying needs, desires, and concerns which are necessary for constructing an

integrative agreement that creates value for both parties. However, when disputants

focus on rights, they try to determine how to handle the dispute by applying some

standard of contract or law. A rights focus is likely to lead to a distributive

agreement. Lastly, when disputants focus on power, they tend to force each other

into making concessions which potentially can result in a desire for revenge or the

creation of future disputes. This model provides three different strategic alternatives

that disputants can adopt when they negotiate the resolution of disputes (Lytle, Brett,

& Shapiro, 1999). In a healthy dispute system, there should be a strong emphasis on

interest-based dispute resolution, and less on rights, and even less on power, for the

former focuses parties on the future not past and on integration not winning and losing

(Fisher & Ury, 1981). Within this framework, we ask whether political influence

affect shapes the health of Chinese private-sector dispute resolution choices.

Within the context of Chinese businesses managing disputes, an interest based 4


approach should included direct negotiations between the parties or the use of private

mediators. This approach is interest based because there is no inherent use of power

or rights, but rather direct appeal between the parties, perhaps with the help of an

outside third party. A rights-based approach involves reference to laws, and thus an

appeal to the court system. This is where decisions, in theory at least, are rule-based

rather than interest based. Lastly, we believe that a power-based approach to dispute

resolution would involve a direct appeal to government agencies, who within China

have fairly absolute authority to impose solutions on parties. The government is a

very powerful player within China, so appealing to the government likely involves an

intended use of power.

Political Influence Among Entrepreneurs

The capital structure of Chinese private enterprises gives private owners a great

deal of power (Tian, Gao, & Cone, 2008). However, since much of the Chinese

economy is controlled by central and local government, it is important for private

entrepreneurs to keep a good relationship with government. Perhaps for this reason,

more and more private entrepreneurs have appeared on the political scene in China.

For example, many of private entrepreneurs serving as the deputies to the People’s

Congress (PC) or the Chinese People’s Political Consultative Conference (CPPCC)

which are the most powerful political associations in China2. The PC is China’s

legislature, which, as stipulated by the Chinese constitution, is the highest organ of

state power in China. Local/Central PCs have the power to elect chief officials at their 2 More detailed introduction about PC and CPPCC can be found in the following websites separately: http://www.npc.gov.cn/englishnpc/news/, http://www.cppcc.gov.cn/English/.

5

http://www.npc.gov.cn/englishnpc/news/

http://www.cppcc.gov.cn/English/


own administrative levels, to draft and approve local/central laws and policies, and to

impeach government officials when necessary. The CPPCC is an advisory body to

the party/government in China, somewhat analogous to an advisory legislative upper

house. By making proposals and criticisms at regular meetings with the party and

government officials, the CPPCC exercises its function of democratic supervision

over the enforcement of China’s constitution, laws, and regulations; the

implementation of the major policies; and the performance of government

departments and their employees. It is the most direct and prominent way to take part

in politics to serve as the deputies to PC or members of CPPCC, though there are

many other channels which they can participate in politics. Being deputies to the PC

and members of the CPPCC can bring private enterprises formal and informal ties

with important government bureaucrats who are also members of the two

organizations (Tian et al., 2008).

Another characteristic of Chinese economy is that it is in transition. China’s

market transition has been state initiated, gradual and experimental. Especially in

the early years of market transition, the institutional environment was characterized

by a lack of efficient market institutions and well-established legal frameworks (Li &

Zhang, 2007). Government still controls significant portions of resources and has

considerable power. The lack of formal institutions often increases firms’ dependence

on informal institutions such as executives’ social ties (Gulati & Gargiulo, 1999).

For example, private entrepreneurs with political capital were less likely to feel

institutional discrimination than those without (Li, 2005). Ties with government

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https://www.researchgate.net/publication/46526841_The_Puzzle_of_China's_Township-Village_Enterprises_The_Paradox_of_Local_Corporatism_in_a_Dual-Track_Economic_Transition?el=1_x_8&enrichId=rgreq-eddc2f87-8ca1-46dc-8d37-3dfcbb78af8a&enrichSource=Y292ZXJQYWdlOzIyODE4MTkxMDtBUzoxMDIzNzIwODkwMDgxMzZAMTQwMTQxODgxNzY4Ng==


officials represent a unique type of managerial resource in a transitional economy like

China (Li and Zhang 2007). Guanxi with local governments helps firms settle

negotiations (Pye, 1995)

Such managerial resources might be useful when there are inter-organizational

disputes. For example, members of the PC or CPPCC have influence within the

government and ties to officials who may have influence over a government agency.

Chinese firms utilize guanxi (connections) to manage organizational interdependence

and to mitigate other environmental threats (Park & Luo, 2001). Chinese society

places great stock on the importance of face (mianzi) which is an intangible form of

social currency and personal status (Park & Luo, 2001). Due to the special status on

government, when private entrepreneurs seek help from government, it is relatively

more convenient for private entrepreneurs with political participation to attain unique

policy and market information and get access to government officials than for those

without political participation.

In addition to access, government officials may want to give mianzi to private

entrepreneurs who are members of PC or CPPCC in reciprocation for their support. In

essence, reciprocity as an implicit ideal of the guanxi network, provides leverage in

interpersonal exchanges of favors (Yang, 1994). So it is a quick, easy and

cost-effective way for private entrepreneurs with political influence to get things done.

This would lead entrepreneurs with political influence to work through government

agencies first, -- more often than rights or interests. So we can induce:

H1: Private entrepreneurs with political participation are more likely to use

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https://www.researchgate.net/publication/227722606_Guanxi_and_Organizational_Dynamics_Organizational_Networking_in_Chinese_Firms?el=1_x_8&enrichId=rgreq-eddc2f87-8ca1-46dc-8d37-3dfcbb78af8a&enrichSource=Y292ZXJQYWdlOzIyODE4MTkxMDtBUzoxMDIzNzIwODkwMDgxMzZAMTQwMTQxODgxNzY4Ng==


a government agency (power focus) to settle disputes, compared to those

without political participation.

A great deal has been written about the evolution of Chinese legal system (Chen,

2007; Child & Tse, 2001; Leung, 2008; Peng, 2003). In past years, the courts were

really just an extension of the government, with judges appointed by the government,

often with little legal training. In recent years, the court system has developed to be

more formal, with judges more often having formal legal training (Xie & Xu, 2008).

Despite these improvements, courts are still seen as having strong ties to the

government. One study of arbitration (Dickie, 2005) showed that courts often do not

enforce arbitration agreements if the ruling is against a government agency, or a

company with strong political ties to the government. To the degree that courts are

believed to have this bias, entrepreneurs with political ties may expect more

advantageous outcomes in court than those without political ties and thus be more

likely than those without political ties to choose courts as a means to resolve disputes.

H2: Private entrepreneurs with political participation are more likely to go

to courts (rights focus) to settle disputes compared to those without political

participation.

If the government and courts are both seen as favoring those with political ties,

then those without political ties are more likely to look elsewhere to resolve disputes.

The alternative to government agencies and the courts is direct negotiation or private

mediation. Thus, those without political power will favor a more interest-based

approach to dispute resolution than those with political power.

8


H3: Private entrepreneurs without political participation are more likely to

use discussion, negotiation, or private third party (interests focus), compared

to those with political participation.

The new institutionalism literature is interested in how the interplay of rules,

norms and networks affect organizational behaviors (Chen, 2007). Political

participation or political networking is embedded in institutional contexts (Li &

Zhang, 2007) and may not have the same value in different periods as the institutional

arrangement changes over time. When institutional support is weak, the value of

private entrepreneurs’ political participation should be particularly important to

enterprises’ operation and development since political capital stemming from political

participation can provide a substitute for the legal system and law enforcement (Peng

2003). However, the effect of political capital will become less important as the

institutional support get stronger. Such a transition is often witnessed in emerging

economies like China, which is transitioning toward – and thus becoming closer to – a

market economy (Li & Zhang, 2007). Child and Tse (2001) suggest that the legal

system in China is adjusting from a mode of accommodating conflicts informally

(often through personal mediation) to one in which the terms of contracts will be

decisive and adjudicated in the courts.

--------------------------------------- Insert Table 1 about here

---------------------------------------

Table 1 shows changes in laws and policies regulating private firms since 1978.

Moving from central planning to market competition, there have been significant

institutional changes in Chinese economy which improved the protection of business 9

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and market institutions (Li & Zhang, 2007). So conflict will be resolved through the

market institutions, rather than through government. The status difference on conflict

resolution choices between those with political power and those without will be

smaller than ever. If institutions are developing in this way, then we would expect to

see differences between those who have political influence and those who do not have

political influence diminish steadily over time.

H4: The bias towards power and rights by those with political power, and the

bias towards interests by those without political power, will weaken over time

within China.

METHODS

Data

This paper draws on the 1995, 1997, and 2000 Chinese Private Enterprise

Surveys, designed and conducted jointly by All-China Federation of Industry and

Commerce and United Front Work Department of the Central Committee of the

Communist Party of China, the China Society of Private Economy at the Chinese

Academy of Social Sciences. Respondents were the founders or the principal

investors of the firm. Individual industrial households, firms created before 1978, and

firms founded in the year surveyed are excluded from the analysis since they do not

meet at least one of data criteria (Chen, 2007). A private enterprise is a profit-making

economic entity who hires more than seven employees and whose assets are

possessed by individual (s), in light of the Private Enterprise Law issued in 1988;

besides, private firms have only been allowed to operate again since 1978; and each 10


survey measured characteristics of entrepreneurs and firms in the previous year before

the survey. We restrict ourselves to those years because later versions of those

surveys were changed, making accurate interpretation of responses problematic.

In each year of the survey respondents were asked if they had any conflicts with

other organizations and if so what type of conflict it was. We restricted ourselves to

those cases where respondents identified conflicts with other private entities (buyers,

customers, or sellers) rather than disputes with government agencies. In 1995, there

were 1629 disputes of this type. In 1997 there were 945 disputes of this type. In

2000 there were 1575 disputes of this type.

Measures

Dependent variables

Conflict resolution strategy. After respondents identified the type of dispute they

experienced, they were then asked what approach they took to resolve that dispute.

The options that were provided included several that were not relevant to our

discussion here (such as “do nothing”) but also several others that were relevant to our

theory. First, some respondents reported going to government agencies to resolve

their disputes, representing an attempt to use power for conflict management.

Second, some respondents reported going to court to resolve their disputes,

representing an attempt to use rights for conflict management. Third, some

respondents reported that they negotiated or used primate mediators to resolve

disputes, representing an interests-based approach to dispute resolution. Each case

was assigned a dummy variable for rights, and one for interests, and one for power (in 11


all cases, 1=used that dispute resolution approach, 0=did not use that approach)

Independent variables

Political participation. It is measured by private entrepreneurs’ membership in PC

or CPPCC. There is a separate measure to ask the subject if he or she holds a position

in PC or CPPCC after the membership item. We assigned 0 for no membership, 1 for

members without a particular position and 2 for members with position.

Control variables

(1) Firm age is measured by years since a firm registered as a private enterprise.

(2) Entrepreneurs’ gender is a dummy variable, which takes 1 if the entrepreneur is

male, otherwise, 0.

(3) Entrepreneurs’ Education is an ordinal variable where it takes 1 if education is

primary school and below, 2 if junior middle school, 3 if high school, 4 if junior

college, and 5 if college and above.

(4) Dispute types: there are three types of disputes: disputes with supplier, disputes

with buyer, and dispute with customer. We include a dummy variable for each type of

dispute.

(5) Year: We include dummy variables for each year in our sample in order to pick up

any temporal variation.

(6) Region: we assign 1 for coastal region where private enterprises located and were

surveyed, otherwise, 0 for inland region.

12


Analyses

We used logistic regression analyses to test our hypotheses regarding the

relationships between political participation of private entrepreneurs and conflict

resolution choices (i.e., Interests, Power and Rights) for the three years together and

also for each year separately.

RESULTS

Table 2 shows descriptive statistics, and correlations for all measures. The mean

for political participation was 0.58.

-------------------------------------------------- Insert Table 2 about here

--------------------------------------------------

Hypothesis 1 predicted that the political participation would be positively related

to the organizational choice of a power focus approach in order to manage conflict. As

shown in Model 2 of Table 3, although political participation was positively

associated with power focus approach as hypothesized, the overall effect was not

significant. In model 3, 4 and 5 of Table 3, although there appears to be an effect over

time (the coefficient of political participation in 1995 is .31, while in 2000, it is -.18),

the effect is not significant in any particular year. Thus, Hypothesis 1 was not

supported, indicating that those with political power are not looking to government to

resolve private disputes to any greater degree than are those without political power.

Also, while this is some hint of a change over time (towards less use of this power

tactic by those with political influence) this trend is not clear enough to support H4.

13


------------------------------------------------- Insert Table 3 about here

--------------------------------------------------

Next, we tested if there was a negative relationship between political participation

and choice of rights focus approach to settle conflict. Consistent with Hypotheses 2

Model 2 of Table 5 shows that the relationship was statistically significant. In Model 3,

4 and 5, we can see there was no effect (β = -.03) in 1995, however the coefficient

goes up to .37 (p <.05) by 2000. We can see private entrepreneurs with political

influence were shifting to stronger use of courts over time, relative to those who had

less political influence. Thus, Hypothesis 3 was supported, but the changes over

time run opposite of what was predicted by hypothesis 4.


--------------------------------------------------

Hypothesis 3 stated that political participation was negatively associated with

organizational choices of interests focus approach to handling conflict. Consistent

with Hypothesis 2, Model 2 of Table 4 shows that political participation was

negatively and significantly associated with an interest-based approach to dispute

resolution (β = -.21, p < .05) when looking at all three years of the survey together.

Thus, Hypothesis 3 was supported. Looking at each year separately (Models 3, 4

and 5 of Table 4), we can see there was no significant influence of political

participation on interests focus in 1995, but there was a significant effect in 1997 and

2000. Thus, there appears to be a trend, where use of interests is actually getting

weaker for those with political power. This is opposite of our prediction in H4. We

expected political influence to have less of an impact on dispute resolution strategies

14


over time, but in fact it has gotten stronger over time. .


--------------------------------------------------

DISCUSSIONS AND CONCLUSIONS

Conflict management has been a central theme in organizational behavior

research. However, there are several important issues that have yet to be addressed.

First, there is lack of research that examines interorganizational conflict management

which might influence organizational performance or even survival. In addition,

conflict research has devoted little attention to the role of political networks in

determining conflict management strategies and organizational perceptions of conflict

resolution. To address these issues, we examined the political resources of Chinese

private entrepreneurs and how those resources were associated with organization

choices of conflict management approaches.

The results of this study lead to several conclusions. First, private entrepreneurs

with political associations may be cautious to depend on the intervention of a

government authority when they handle conflicts with other organizations.

Specifically, political association was not significantly related with organizational

choices of power focus approach. This finding suggests that although Chinese private

entrepreneurs actively participating in political association may have an incentive to

utilize the political resources in the favor of their organizations’ interest, they may not

want to be overt in the use of that resource. The explicit usage of such network

resources might be detrimental to related government authority because it might cause

15


a fairness issue in society. In terms of trends over time, there might be a trend in the

effect of political participation on using government agencies to settle conflict, but we

cannot conclude that from our present data.

Second, the lack of political associations does encourage private entrepreneurs to

adopt a more integrative approach to dispute resolution. Specifically, political

association was negatively and significantly related with organizational adoption of an

interest focused approach. The result indicates that politically less powerful

organizations are more inclined to involve in integrative approach when they handle

inter-organizational conflict since they do not have a power to induce more favorable

resolutions for themselves when dealing with government agencies or courts.

Third, the relatively preferred alternative to interest-based dispute resolution for

those with political power appears to be going to courts. In a sense, this is

theoretically better than going to government since it could indicate a move from

power to rights (which is deemed to be a beneficial shift according to Ury, Brett, and

Goldberg, 1988), but that assumes that courts are really neutral, rule-based institutions

that make decisions based on assessment of the rights of the disputants. The very

fact that the politically better-connected are more likely to use courts seems to

indicate that they may be using their political ties to have an advantage in a court

system that is known to strongly favor the government. Also, while it would

theoretically be better to shift from power to rights, it would be even better to shift to

interests. That is what those with less political influence appear to be doing.

What is surprising is the trends indicated in this data. From 1995 to 2000, years

16


when there was rapid change in the economy in China and rapid development of

social and legal institutions, we expected political affiliation to become less influential

in dispute resolution strategies, on the assumption that decisions would be make less

and less in favor of those with government contacts. This is not the case at least in

the research period. If anything, the trend was in the opposite direction, with more

clear differences visible in 2000 than in 1995.

The present project can make both theoretical and practical contributions to

existing literature. First, while entrepreneurs’ political networking (political

participation) has long been highlighted in the literature, most previous studies have

focused on its effect on firm performance (Li & Zhang, 2007; Peng & Luo, 2000).

However, given the fast growing number of private firms in China, conflict between

them and other entities will be rather a common phenomenon than an exception.

Combining conflict literature with the political ties literature, our study will shed light

on the how political participation influences organizational choices of conflict

resolution strategy.

Also, the international entrepreneurship literature has not yet paid attention to

how institutional factors influence managerial processes (Li & Zhang, 2007). Chinese

management research has rarely been approached from a change perspective in the

international business literature (Fang, Zhao, & Worm, 2008). Our research can fill

this gap looking at the effect of institutional changes in Chinese society and their

effect on dispute resolution strategies.

In sum, findings of this research would allow us to better understand how

17




political participation functions when private enterprises handle inter-organizational

conflict as well as how the institutional contexts interact with the effects of political

participation.

18


19

Table 1 Changes in laws and policies regulating private firms since 1978 to 1999

1978 The 3rd plenum of the CCP’s 11th Central Committee allowed individual industrial households

(getihu) to operate.

1983 The ‘Three No’ policy regulated private enterprises with more than one employee (no promotion, no

public propaganda and no crackdown).

1988 The Private Enterprise Law was released.

Constitutional amendment recognized private enterprises as supplementary to the socialist public

sector.

The State Council released the Tentative Stipulations on Private Enterprises, which defined a private

firm as ‘a for-profit organization that is owned by individuals and employs more than eight

people’.

1992 Communist Party patriarch Deng Xiaoping inspected Guangdong province and called for deepening

the transition to the market economy.

1993 Proposals on Promoting the Development of Individual and Private Enterprises and the Company

Law were released.

1997 The 15th Party Congress recognized the legal status of private enterprises.

n important part of the 1999 A constitutional amendment acknowledged that ‘non-public enterprises are a

socialist market economy’.

Note: Chen W. (2007), Department of SME under National Development and Ref

All-China Federation of Industry and Commerce (2007).

orm Commission (2007),


20

TABLE 2

Descriptive Statistics and Correlations

Mean SD N Region Gender Education Firm age Political Participation

Dispute with supplier

Dispute with buyer

Dispute with customer Interests Power Rights

Region 0.58 0.49 4681 1.00 Gender 0.91 0.28 4674 .025+ 1.00 Education 2.98 1.00 4667 -.014 0.00 1.00 Firm age 6.00 3.94 4681 .007 .039** -.102** 1.00 Political Participation 0.58 0.69 4164 -.075** 0.02 .105** .241** 1.00 Dispute with supplier 0.20 0.40 4681 .011 0.00 .057** -0.02 0.01 1.00 Dispute with buyer 0.67 0.47 4681 .032* .049** -.042** .034* 0.00 -.704** 1.00 Dispute with customer 0.14 0.34 4681 -.057** -.071** -0.01 -0.02 -0.02 -.197** -.558** 1.00 Interests Approach 0.87 0.33 4681 -.004 -0.02 0.01 -.050** -.055** .036* -.063** .045** 1.00 Power Approach 0.03 0.16 4681 -.014 0.00 0.00 -0.03 0.00 0.02 -.050** .050** -.438** 1.00 Rights Approach 0.10 0.30 4681 .012 0.02 -0.01 .072** .064** -.049** .097** -.077** -.874** -.055** 1.00

a. + p<.10; * p<.05; **p<.01;*** p<.001 (two-tailed tests)


TABLE 3 Logistic Regression of Power focus

Model 1 Model 2Model 3(1995)

Model 4 (1997)

Model 5 (2000)

Political Participation 0.08 0.31 0.13 -0.18 (0.14) (0.26) (0.23) (0.28) Year 1997 0.60* 0.59* (0.23) (0.23) Year 2000 -0.28 -0.30 (0.25) (0.25) Dispute With buyer -0.36 -0.36 0.12 -0.57 -0.60 (0.24) (0.24) (0.46) (0.36) (0.48) Dispute With customer 0.42 0.43 0.90+ -0.24 0.55 (0.29) (0.29) (0.54) (0.49) (0.51) Gender 0.12 0.11 0.54 1.29 -0.66 (0.36) (0.36) (0.74) (1.02) (0.48) Education 0.06 0.06 -0.13 0.11 0.19 (0.10) (0.10) (0.17) (0.17) (0.19) Firm Age -0.04 -0.04 -0.08+ -0.04 0.00 (0.03) (0.03) (0.17) (0.05) (0.05) Region -0.02 -0.01 0.96* -1.16** 0.26 (0.20) (0.20) (0.42) 0.40 (0.39) Constant -3.59*** -3.60*** -4.50*** -3.73** -3.84*** (0.55) (0.55) (1.02) (1.22) 0.99 N 4149 4149 1629 945 1575 Nagelkerke R2 0.031 0.032 0.04 0.058 0.043 Cox & Snell R2 0.007 0.007 0.008 0.018 0.007 -2Log likelihood 1001.43 1001.13 354.79 332.60 285.38 a. + p<.10; * p<.05; **p<.01;*** p<.001 (two-tailed tests)

b. Standard Errors in Parentheses

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TABLE 4 Logistic Regression of Rights focus


Model 4 (1997)

Model 5(2000)

Political Participation 0.23** 0.03 0.29+ 0.37**

(0.08) (0.13) (0.17) (0.12) Year 1997 -0.10 -0.10 (0.15) (0.15) Year 2000 0.19 0.14 (0.12) (0.12) Dispute With buyer 0.55*** 0.55*** 0.16 0.77* 0.91*** (0.15) (0.15) (0.22) (0.34) (0.26) Dispute With customer -0.71** -0.70** -0.60+ -1.12 -0.64 (0.26) (0.26) (0.37) (0.78) (0.44) Gender 0.24 0.23 1.05* -0.32 -0.05 (0.21) (0.21) (0.47) (0.46) (0.29) Education -0.08 -0.09+ 0.02 -0.22 -0.14+

(0.06) (0.06) (0.09) (0.14) (0.08) Firm Age 0.05*** 0.04** 0.07** 0.07* 0.01 (0.01) (0.01) (0.02) (0.03) (0.02) Region 0.06 0.09 -0.24 0.31 0.28+

(0.11) (0.11) (0.17) (0.24) (0.17) Constant -2.95*** -2.98*** -3.64*** -2.65*** -2.76*** (0.32) (0.32) (0.58) (0.70) (0.49) N 4149 4149 1629 945 1575 Nagelkerke R2 0.040 0.045 0.035 0.071 0.068 Cox & Snell R2 0.019 0.021 0.017 0.031 0.034 -2Log likelihood 2617.46 2608.67 1023.57 508.86 1048.22a. + p<.10; * p<.05; **p<.01;*** p<.001 (two-tailed tests)


22


TABLE 5

Logistic Regression of Interests focus


Model 4 (1997)

Model 5(2000)

Political Participation -0.21** -0.09 -0.24+ -0.29**

(0.07) (0.12) (0.14) (0.16) Year 1997 -0.12 -0.11 (0.13) (0.13) Year 2000 0.10 -0.06 (0.11) (0.11) Dispute With buyer -0.35** -0.35** -0.16 -0.23 -0.67** (0.13) (0.13) (0.20) (0.25) (0.23) Dispute With customer 0.24 0.23 0.16 0.52 0.14 (0.19) (0.19) (0.30) (0.41) (0.32) Gender -0.23 -0.22 -0.95* -0.13 0.20 (0.19) (0.19) (0.40) (0.42) (0.25) Education 0.05 0.06 0.01 0.09 0.09 (0.05) (0.05) (0.08) (0.11) (0.08) Firm Age -0.03** -0.03* -0.04* -0.03 -0.01 (0.01) (0.01) (0.02) (0.03) (0.02) Region -0.04 -0.06 0.02 0.18 -0.29+

(0.10) (0.10) (0.16) (0.20) (0.07) Constant 2.52*** 2.55*** 3.22*** 2.12*** 2.38 (0.28) (0.28) (0.50) (0.59) (0.44) N 4149 4149 1629 945 1575 Nagelkerke R2 0.016 0.019 0.019 0.023 0.037 Cox & Snell R2 0.008 0.010 0.010 0.012 0.020 -2Log likelihood 3124.41 3115.66 1196.67 711.68 1190.25a. + p<.10; * p<.05; **p<.01;*** p<.001 (two-tailed tests)


23


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Conflict Resolution Strategies of Chinese Private Entrepreneurs: The Role of Political Participation