Institution innovation Analysis on Corporate Cross Shareholding

Cross shareholding as a type of institutional arrangement is discussed from institution innovation perspective. Upon providing a brief introduction of previous study on cooperate cross shareholding, this paper first discusses the main body and their own motivations of this institutional change, then conducts path dependent analyses on the political and economical background of this institutional change, the causes and conditions of institutional change, the mode and process of institutional change and the character of institutional change. In depth analysis is preceded on the influence of this institutional arrangement on economic performance from several aspects, which including economical efficiency of scale, technical and economic feasibility, risk management ability, market failure and externality prevention. Finally, after further comment on its practical value on regional economic cooperation and global economic integration, making timely and appropriate use of the cross shareholding in the process of restructuring of state-owned enterprises, upgrading and updating of private enterprises and the transition of national industrial structure is highly recommended.