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Reforms and Productivity Dynamics in Chinese State-Owned Enterprises

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  • Peter McGoldrick
  • Patrick Paul Walsh

Abstract

Institutional change has taken place incrementally since 1978 for State-Owned Enterprises (SOEs) in the Industrial Sector of China. We will provide evidence for the notion that this is largely due to increased domestic competitive pressures and the opportunities arising from the integration of international markets. In this paper we estimate the effect of deep reform (the right to hire and fire labour, buy and sell capital and operate on international markets) on the productivity dynamics of entreprises. Using a unique balanced panel of681 SOEs for the period 1980 to 1994, we find consistent production function estimatesusing an algorithm put forward in Olley and Pakes (1996), which estimates using an simultaneity bias. Futhermore, we allow selection bias by formulating an entry that exposure to deep reform hav lead to higher productivity realisations while remaining under state ownership.

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Paper provided by IIIS in its series The Institute for International Integration Studies Discussion Paper Series with number iiisdp021.

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Date of creation: 01 May 2004
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Handle: RePEc:iis:dispap:iiisdp021

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Cited by:
  1. Marian Rizov & Patrick Paul Walsh, 2005. "Linking Productivity to Trade in the Structural Estimation of Production within UK Manufacturing Industries," The Institute for International Integration Studies Discussion Paper Series iiisdp98, IIIS.

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