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How does privatization work in China?

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  • Bai, Chong-En
  • Lu, Jiangyong
  • Tao, Zhigang

Abstract

Bai, Chong-En, Lu, Jiangyong, and Tao, Zhigang--How does privatization work in China? Using a comprehensive panel data set of China's state-owned enterprises, we investigate the impacts of privatization on social welfare and firm performance indicators. The privatization of China's state-owned enterprises was found to have little impact on the change of firm employment, but it did lead to increasing sales and hence higher labor productivity. Meanwhile, there was a gain in firm profitability contributed to mostly by the reduction of managerial expenses to sales. The impact of privatization was sustainable in the long run, and was more pronounced when state ownership was reduced to minority position as opposed to majority position.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Comparative Economics.

Volume (Year): 37 (2009)
Issue (Month): 3 (September)
Pages: 453-470

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Handle: RePEc:eee:jcecon:v:37:y:2009:i:3:p:453-470

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Web page: http://www.elsevier.com/locate/inca/622864

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Keywords: Privatization Social welfare responsibility Firm performance Firm employment Managerial expenses;

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References

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Cited by:
  1. Chen, Shiyi & Jefferson, Gary H. & Zhang, Jun, 2011. "Structural change, productivity growth and industrial transformation in China," China Economic Review, Elsevier, Elsevier, vol. 22(1), pages 133-150, March.
  2. Dennis Tao Yang & Junsen Zhang & Shaojie Zhou, 2012. "Why Are Saving Rates So High in China?," NBER Chapters, National Bureau of Economic Research, Inc, in: Capitalizing China, pages 249-278 National Bureau of Economic Research, Inc.
  3. TODO Yasuyuki & INUI Tomohiko & YUAN Yuan, 2012. "Effects of Privatization on Exporting Decisions: Firm-level evidence from Chinese state-owned enterprises," Discussion papers, Research Institute of Economy, Trade and Industry (RIETI) 12015, Research Institute of Economy, Trade and Industry (RIETI).
  4. Evžen Kočenda & Jan Hanousek, 2012. "State ownership and control in the Czech Republic," Economic Change and Restructuring, Springer, Springer, vol. 45(3), pages 157-191, August.
  5. Dammert, Ana C. & Ural Marchand, Beyza, 2013. "Privatization in China: Technology and Gender in the Manufacturing Sector," Working Papers, University of Alberta, Department of Economics 2013-12, University of Alberta, Department of Economics.
  6. BAI, Chong-En & QIAN, Zhenjie, 2010. "The factor income distribution in China: 1978-2007," China Economic Review, Elsevier, Elsevier, vol. 21(4), pages 650-670, December.
  7. Heywood, John S. & Siebert, W. Stanley & Wei, Xiangdong, 2009. "Job Satisfaction and the Labor Market Institutions in Urban China," IZA Discussion Papers 4254, Institute for the Study of Labor (IZA).
  8. Han, Jun & Liu, Runjuan & Ural Marchand, Beyza & Zhang, Junsen, 2013. "Market Structure, Imperfect Tariff Pass-Through, and Household Welfare in Urban China," Working Papers, University of Alberta, Department of Economics 2013-11, University of Alberta, Department of Economics, revised 01 Jul 2014.
  9. Michael Firth & Sonia Wong & Yong Yang, 2014. "The double-edged sword of CEO/chairperson duality in corporatized state-owned firms: evidence from top management turnover in China," Journal of Management and Governance, Springer, Springer, vol. 18(1), pages 207-244, February.
  10. Söderbom, Måns & Weng, Qian, 2012. "Multi-product firms, product mix changes and upgrading: Evidence from China's state-owned forest areas," Working Papers in Economics, University of Gothenburg, Department of Economics 525, University of Gothenburg, Department of Economics.
  11. Bai, Chong-En & Lu, Jiangyong & Tao, Zhigang, 2010. "Capital or knowhow: The role of foreign multinationals in Sino-foreign joint ventures," China Economic Review, Elsevier, Elsevier, vol. 21(4), pages 629-638, December.
  12. Wang F.S., Leonard & Chen, Tai-Liang, 2011. "Privatization, Efficiency Gap, and Subsidization with Excess Taxation Burden," Hitotsubashi Journal of Economics, Hitotsubashi University, Hitotsubashi University, vol. 52(1), pages 55-68, June.
  13. Thi QuyVo & Duc Khuong Nguyen & Fredric WilliamSwierczek, 2014. "Corporate performance of privatized firms in Vietnam," Working Papers, Department of Research, Ipag Business School 2014-240, Department of Research, Ipag Business School.
  14. Nie, Huihua & Jiang, Ting & Yang, Rudai, 2012. "A Review and Reflection on the Use and Abuse of Chinese Industrial Enterprises Database," MPRA Paper 50945, University Library of Munich, Germany.
  15. Cai, Hongbin & Wang, Miaojun & Yan, Se, 2014. "Why Do Large Firms Willingly Pay High Wages in Developing Countries?," MPRA Paper 53538, University Library of Munich, Germany.
  16. Sprenger, C., 2010. "State Ownership in the Russian Economy. Part 2. Governance Problems and Performance Effects," Journal of the New Economic Association, New Economic Association, New Economic Association, issue 7, pages 90-110.
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  18. Jun Wang & John Whalley, 2014. "Are Chinese Markets for Manufactured Products More Competitive than in the US?: A Comparison of China –US Industrial Concentration Ratios," NBER Working Papers 19898, National Bureau of Economic Research, Inc.

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