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State-Owned Enterprises, Exporting and Productivity in China: A Stochastic Dominance Approach

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  • Robert Elliott
  • Ying Zhou

Abstract

A popular explanation for China's rapid economic growth in recent years has been the dramatic increase in the number of private domestic and foreign-owned firms and a decline in the state-owned sector. However, recent evidence suggest that China's state-owned enterprise (SOEs) are in fact stronger than ever. In this paper we examine over 78,000 manufacturing firms between 2002 and 2006 to investigate the relationship between ownership structure and the degree of firm-level exposure to export markets and firm-level productivity. Using a conditional stochastic dominance approach we reveal that although our results largely adhere to prior expectations, the performance of state-owned enterprises differs markedly between those that export and those that supply the domestic market only. It appears that China's internationally focused SOEs have become formidable global competitors.

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  • Robert Elliott & Ying Zhou, 2013. "State-Owned Enterprises, Exporting and Productivity in China: A Stochastic Dominance Approach," Discussion Papers 13-03, Department of Economics, University of Birmingham.
    • Handle: RePEc:bir:birmec:13-03
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    2. WAKASUGI Ryuhei & ZHANG Hongyong, 2015. "Impacts of the World Trade Organization on Chinese Exports," Discussion papers 15021, Research Institute of Economy, Trade and Industry (RIETI).
    3. Lin, Eric S. & Lin, Chia-Ling & Lin, Hui-Lin & Hsiao, Yi-Chi, 2023. "Is downsizing a good strategy during the downturn? Evidence from Taiwanese manufacturing firms," Japan and the World Economy, Elsevier, vol. 65(C).
    4. Taghizadeh-Hesary, Farhad & Yoshino, Naoyuki & Kim, Chul Ju & Mortha, Aline, 2019. "A Comprehensive Evaluation Framework on the Economic Performance of State-Owned Enterprises," ADBI Working Papers 949, Asian Development Bank Institute.
    5. Shao, Yanmin & Shang, Yan, 2016. "Decisions of OFDI Engagement and Location for Heterogeneous Multinational firms: Evidence from Chinese firms," Technological Forecasting and Social Change, Elsevier, vol. 112(C), pages 178-187.
    6. Li, Bin & Pan, Ailing & Xu, Lei & Liu, Xin & Qin, Shuqian, 2020. "Imprinting and peer effects in acquiring state ownership: Evidence from private firms in China," Pacific-Basin Finance Journal, Elsevier, vol. 61(C).
    7. Ryuhei Wakasugi & Hongyong Zhang, 2016. "Impacts of the WTO accession on Chinese exports," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 14(4), pages 347-364, October.
    8. Elliott, Robert J.R. & Zhou, Ying, 2015. "Co-location and Spatial Wage Spillovers in China: The Role of Foreign Ownership and Trade," World Development, Elsevier, vol. 66(C), pages 629-644.
    9. Karplus, Valerie J. & Geissmann, Thomas & Zhang, Da, 2021. "Institutional complexity, management practices, and firm productivity," World Development, Elsevier, vol. 142(C).

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    Keywords

    Productivity; China; firm-level; State-owned enterprise; heterogeneity; stochastic dominance;
    All these keywords.

    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise
    • P3 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions
    • D2 - Microeconomics - - Production and Organizations

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