ABSTRACT
This introduction presents an overview of the key concepts discussed in the subsequent chapters of this book. The book analyzes the institutional background of the township-village enterprise (TVE), and helps to answer the questions by analyzing provincial-level panel data. It shows that the TVE sector is much more efficient than the state sector: the growth rate of the total factor productivity (TFP) and the share of TFP growth in the growth of the TVE output are many times higher than those of state-owned enterprises (SOE). The book deals with some rural-rural and rural-urban migration phenomena which have accompanied the development of TVEs and which cannot be explained by existing theories. It focuses on the paradoxical success, despite the lack of well-defined private property rights of the Chinese TVE. The book argues that a TVE is best described as a vaguely-defined cooperative, essentially a communal organization without a well- defined ownership structure.
