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 Recruitipedia: Insights into recruitment in China

Welcome to the first issue of Recruitipedia: ExecutiveSurf's occasional review of the talent landscape around the world. This month, we will feature China. China is old news when it comes to macro-economic expansion. Tales of impending potentially catastrophic, sub 7% GDP growth figures have been circulating for a while too - although so far, this has been averted. Not bad for a country that continues to drive through the most ambitious business transformation program in human history. What remains in a state of great flux is the war for talent there. What does it all mean from an HR perspective? You will find Recruitipedia of interest if you are hiring talent in China, checking out demand for your expertise in the Chinese recruitment market, or if you are simply interested in better understanding the talent market there. China's rapid economic growth has resulted in an increasingly individualistic society. Traditional values are still at the core of Chinese culture, but personal ambition and aspirations are starting to affect behaviour, particularly among the younger generations. This means foreign companies can face difficulties recruiting and retaining staff in the country.

 This means nothing to me

“IRRELEVANCE theory” contains one of the most startling conclusions in economic thought. In two papers, published in 1958 and 1963, Franco Modigliani and Merton Miller argued that a firm's financial structure—its split between equity and different sorts of debt, its dividend policy and so on—made no difference to its total value. Financial structure merely affected how the corporate pie was shared out; it had no effect on the size of the pie itself. Managers and owners should therefore waste no time agonising about gearing, dividends and such like, and instead devote themselves to maximising the value of their firms. This insight helped win Modigliani and Miller Nobel prizes in economics (although two such giants would surely have earned them without it). Unfortunately, it also set back for a generation the study by economists of corporate finance. The problem is not that irrelevance theory is wrong but that it is true only in circumstances so rare that they are the exception rather than the rule: that the choice of financial structure does indeed affect the value of a firm. That choices about debt, equity and so forth do matter is the underlying theme of a magnificent new book, “The Theory of Corporate Finance”, by Jean Tirole, of the University of Toulouse.

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