Efficiency, technical progress, and best practice in Chinese state enterprises (1980-1994)
In spite of rapid economic growth and swift structural change during the last two decades, China’s industrial reform is far from complete, especially with regard to state enterprises (SOEs). Although troubled with huge financial losses, heavy debt, and substantial over-staffing, SOEs will continue to play a crucial part in the government policy to maintain social stability and economic growth in China. This study, based on samples of about 700 state enterprises during 1980-94, investigates productivity performance of the SOEs using Data Envelopment Analysis and Malmquist Index. Our empirical results show that average technical efficiency had been low among the sample SOEs. Considerable productivity growth was found, but it was mainly accomplished through technical progress rather than efficiency improvement. Regression analyses indicate that wage incentives and education had positive impacts on productivity growth, while large scale was an important determinant of whether an SOE was applying best practice technology. It is also shown that large SOEs were more likely to generate technical progress. These findings are consistent with the industrial structural adjustment program initiated by the government in 1994, which has focused on improving productive efficiency via redundancies and technology upgrading, and on building its best SOEs into conglomerates.
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gary Jefferson & Bai Huamao & Guan Xiaojing & Yu Xiaoyun, 2006. "R&D Performance in Chinese industry," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(4-5), pages 345-366.
- Haishun Sun & Phillip Hone & Hristos Doucouliago, 1999. "Economic openness and technical efficiency: A case study of Chinese manufacturing industries," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 7(3), pages 615-636, November.
- Woo Wing Thye & Hai Wen & Jin Yibiao & Fan Gang, 1994. "How Successful Has Chinese Enterprise Reform Been? Pitfalls in Opposite Biases and Focus," Journal of Comparative Economics, Elsevier, vol. 18(3), pages 410-437, June.
- Theodore Groves & Yongmiao Hong & John McMillan & Barry Naughton, 1994. "Autonomy and Incentives in Chinese State Enterprises," The Quarterly Journal of Economics, Oxford University Press, vol. 109(1), pages 183-209.
- Nolan, Peter & Xiaoqiang, Wang, 1999. "Beyond privatization: Institutional innovation and growth in China's large state-owned enterprises," World Development, Elsevier, vol. 27(1), pages 169-200, January.
- Wu Yanrui, 1994. "Productivity Growth, Technological Progress and Technical Efficiency Change in China: A Three-Sector Analysis," Chinese Economies Research Centre (CERC) Working Papers 1994-05, University of Adelaide, Chinese Economies Research Centre.
- Xiao-yuan Dong & Louis Putterman, 2001. "On the Emergence of Labour Redundancy in China's State Industry: Findings from a 1980-1994 Data Panel," Comparative Economic Studies, Palgrave Macmillan, vol. 43(2), pages 111-128, July.
- Liu, Zinan & Liu, Guy Shaojia, 1996. "The Efficiency Impact of the Chinese Industrial Reforms in the 1980's," Journal of Comparative Economics, Elsevier, vol. 23(3), pages 237-255, December.
- Jefferson, Gary H. & Rawski, Thomas G. & Zheng, Yuxin, 1996. "Chinese Industrial Productivity: Trends, Measurement Issues, and Recent Developments," Journal of Comparative Economics, Elsevier, vol. 23(2), pages 146-180, October.
- Lee, Young, 1997. "Bank Loans, Self-Financing, and Grants in Chinese SOEs: Optimal Policy under Incomplete Information," Journal of Comparative Economics, Elsevier, vol. 24(2), pages 140-160, April.
- Groves, Theodore & Yongmiao Hong & John McMillan & Barry Naughton, 1995. "China's Evolving Managerial Labor Market," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 873-92, August.
- Guofu Tan & Justin Yifu Lin, 1999. "Policy Burdens, Accountability, and the Soft Budget Constraint," American Economic Review, American Economic Association, vol. 89(2), pages 426-431, May.
- Fare, Rolf & Shawna Grosskopf & Mary Norris & Zhongyang Zhang, 1994. "Productivity Growth, Technical Progress, and Efficiency Change in Industrialized Countries," American Economic Review, American Economic Association, vol. 84(1), pages 66-83, March.
- Mao, Weining & Koo, Won W., 1997. "Productivity growth, technological progress, and efficiency change in chinese agriculture after rural economic reforms: A DEA approach," China Economic Review, Elsevier, vol. 8(2), pages 157-174.
- Smyth, Russell, 2000. "Should China be Promoting Large-Scale Enterprises and Enterprise Groups?," World Development, Elsevier, vol. 28(4), pages 721-737, April.
- Li, David D. & Liang, Minsong, 1998. "Causes of the Soft Budget Constraint: Evidence on Three Explanations," Journal of Comparative Economics, Elsevier, vol. 26(1), pages 104-116, March.
- Lee, Young, 1999. "Wages and Employment in China's SOEs, 1980-1994: Corporatization, Market Development, and Insider Forces," Journal of Comparative Economics, Elsevier, vol. 27(4), pages 702-729, December.
- Lin, Justin Yifu & Cai, Fang & Li, Zhou, 1998. "Competition, Policy Burdens, and State-Owned Enterprise Reform," American Economic Review, American Economic Association, vol. 88(2), pages 422-27, May.
- Zhang, Anming & Zhang, Yimin & Zhao, Ronald, 2001. "Impact of Ownership and Competition on the Productivity of Chinese Enterprises," Journal of Comparative Economics, Elsevier, vol. 29(2), pages 327-346, June.
- Cornwell, Christopher & Schmidt, Peter & Sickles, Robin C., 1989.
"Production Frontiers With Cross-Sectinal And Time-Series Variation In Efficiency Levels,"
89-18, C.V. Starr Center for Applied Economics, New York University.
- Cornwell, Christopher & Schmidt, Peter & Sickles, Robin C., 1990. "Production frontiers with cross-sectional and time-series variation in efficiency levels," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 185-200.
- Lau, Kam-Tim & Brada, Josef C., 1990. "Technological progress and technical efficiency in Chinese industrial growth: A frontier production function approach," China Economic Review, Elsevier, vol. 1(2), pages 113-124.
When requesting a correction, please mention this item's handle: RePEc:eee:jcecon:v:31:y:2003:i:1:p:134-152. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.