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The Transformation of Collectively Owned Enterprises and its Outcomes in China, 2001-05

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  • Xia, Jun
  • Li, Shaomin
  • Long, Cheryl
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    Abstract

    Summary Previous studies have primarily focused on the relative success of collectively owned enterprises (COEs) in China during the early years of reform, but they have ignored the agency problems inherent in this type of organizational form that may be an obstacle to further improving performance in a changing environment. Drawing on agency theory and the privatization literature, we argue that the transformed COEs in the ongoing organizational transformation process may achieve better performance by reducing agency costs. We examine a sample of COEs in Chinese manufacturing industries and track their ownership statuses from 2000 to 2005. Our findings reveal that the transformed firms achieved better performance than the traditional, untransformed COEs by mitigating agency problems.

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    Bibliographic Info

    Article provided by Elsevier in its journal World Development.

    Volume (Year): 37 (2009)
    Issue (Month): 10 (October)
    Pages: 1651-1662

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    Handle: RePEc:eee:wdevel:v:37:y:2009:i:10:p:1651-1662

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    Web page: http://www.elsevier.com/locate/worlddev

    Related research

    Keywords: ownership transformation agency problems performance collectively owned enterprises;

    References

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    Cited by:
    1. Sai Ding & Alessandra Guariglia & John Knight, . "Investment and financing constraints in China: does working capital management make a difference?," Discussion Papers 11/06, University of Nottingham, GEP.
    2. John Knight & Sai Ding and Alessandra Guariglia, 2010. "Does China overinvest? Evidence from a panel of Chinese firms," Economics Series Working Papers 520, University of Oxford, Department of Economics.

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