Adjustment of State Owned and Foreign-Funded Enterprises in China to economic reforms,1980s-2007: a logistic smooth transition regression (LSTR) approach
AbstractThis paper applies a logistic smooth transition regression approach to the estimation of a homogenous aggregate value added production function of the State Owned (SOE) and Foreign-Funded Enterprises (FFE) in China, 1980s-2007. The transition associated with the eco- nomic reforms in China is estimated applying a curvilinear logistic function, where the speed and the timing of the transition are endoge- nously determined by the data. We ï¬nd high but gradually declining markups in both SOEs and FFEs during the early stages of the ad- justment, with SOEs having a much larger scale and market size than the FFEs. However, over the transition process, returns to scale in industrial SOEs dropped sharply. For both FFEs and SOEs the tran- sition is slow, with a midpoint about 7 and 14 years, respectively. We ï¬nd signiï¬cant increase of TFP growth rate for both FFEs and SOEs, by 0.1436 and 0.1971, respectively.
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Bibliographic InfoPaper provided by Department of Economics, UC Santa Cruz in its series Santa Cruz Department of Economics, Working Paper Series with number qt7919w74z.
Date of creation: 01 May 2009
Date of revision:
smooth transition regression; homogenous aggregate value;
Other versions of this item:
- Joshua Aizenman & Nan Geng, 2009. "Adjustment of State Owned and Foreign-Funded Enterprises in China to Economic Reforms,1980s-2007: a logistic smooth transition regression (LSTR) approach," NBER Working Papers, National Bureau of Economic Research, Inc 15274, National Bureau of Economic Research, Inc.
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- F15 - International Economics - - Trade - - - Economic Integration
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
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