Abstract

During China's gradual transition from a centrally planned economy to a market-based economy, the acquisition of State-Owned Enterprises (SOE) by private enterprises has been an eye catching phenomenon and regarded a key growth means for Chinese private business groups (PBG). SOE acquisitions in such unique institutional embeddings are expected to be motivated by two distinct while complementary rationalities---economic rationality (acquisition of efficiency enhancing recourses such as property-based and knowledge-based resources endowed in target SOEs) and social capital rationality (acquisition of governmental networking resources inherited in target SOEs). Two models are proposed to examine the correlation between SOEs' resource endowments and PBGs' degree of acquisitiveness on a sample of 49 SOE acquisition cases taken place in China's stock markets during 1997 to 2000. The results suggest that, in general, SOEs' social capital endowment has significant positive impacts on PBGs' degree of acquisitiveness, while property-based and knowledge-based resources are barely influential. However, PBGs demonstrate different acquisitive preferences at different stages of group development. Acquisitive preferences also differ greatly if founders of PBGs carry different social characteristics.