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State-Owned versus Township and Village Enterprises in China*

Author

Listed:
  • Enrico C Perotti

    (University of Amsterdam and CEPR)

  • Laixiang Sun

    (International Institute for Applied Systems Analysis, Laxenburg, Austria)

  • Liang Zou

    (University of Amsterdam)

Abstract

This paper presents an up-to-date survey of the comparison issue between state-owned enterprises (SOEs) and township-village enterprises (TVEs) in China. Although TVEs are at a disadvantage in areas such as technology, labor skills, education levels of staff, access to bank loans and government supports, they have important advantages in ownership and governance structures, personnel systems and labor relations, and conditions of institutional arrangement. These advantages apparently have outweighed the disadvantages, allowing the TVEs to outperform SOEs and successfully expand their market shares that previously belonged to the SOEs. However, our analysis also reveals that SOEs may not have performed so badly if their broad social contributions other than reported profits are also taken into account. In conclusion, we argue that both SOEs and TVEs need to reform their ownership and governance structures. In particular, if TVEs are to develop further during the next century, they cannot avoid the grassroots democratization.

Suggested Citation

  • Enrico C Perotti & Laixiang Sun & Liang Zou, 1999. "State-Owned versus Township and Village Enterprises in China*," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 41(2-3), pages 151-179, September.
    • Handle: RePEc:pal:compes:v:41:y:1999:i:2:p:151-179
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    Citations

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    Cited by:

    1. Xia, Jun & Li, Shaomin & Long, Cheryl, 2009. "The Transformation of Collectively Owned Enterprises and its Outcomes in China, 2001-05," World Development, Elsevier, vol. 37(10), pages 1651-1662, October.
    2. Liu, Xiaojie & Shen, Jim Huangnan & Deng, Kent, 2016. "A rational path towards a Pareto optimum for reforms of large state-owned enterprise in China, past, present and future," Economic History Working Papers 67019, London School of Economics and Political Science, Department of Economic History.
    3. Xiangquan Zeng & Liwen Chen & Zhongxing Su, 2014. "The evolution of human resource management in China: traditions, reforms and developments," Chapters, in: Bruce E. Kaufman (ed.), The Development of Human Resource Management Across Nations, chapter 5, pages 92-122, Edward Elgar Publishing.
    4. Dong, Xiao-Yuan & Putterman, Louis, 2003. "Soft budget constraints, social burdens, and labor redundancy in China's state industry," Journal of Comparative Economics, Elsevier, vol. 31(1), pages 110-133, March.
    5. Maria Csanadi, 2001. "A Model Explaining Social and Political Change of Party-states Structural and Dynamic Background of Similarities and Differences in Reproduction, reforms, Collapse and Transformation," CERS-IE WORKING PAPERS 0101, Institute of Economics, Centre for Economic and Regional Studies.
    6. Wei-qi Cheng, 2005. "The Relationship Between the Chinese Government and Corporatised Enterprises in the Current Transition Period," Asia Pacific Journal of Public Administration, Taylor & Francis Journals, vol. 27(2), pages 117-139, December.
    7. Guo Yung-Hsing, 2011. "How Low- and Medium-technology Industries in Developing Countries Compete with Multinationals: Lessons from China’s Home Electronics Sector," Chapters, in: Paul L. Robertson & David Jacobson (ed.), Knowledge Transfer and Technology Diffusion, chapter 9, Edward Elgar Publishing.
    8. Kurt Hess & Abeyratna Gunasekarage & Martin Hovey, 2010. "State‐dominant and non‐state‐dominant ownership concentration and firm performance," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 6(4), pages 264-289, September.
    9. Sun, Laixiang, 2002. "Fading out of local government ownership: recent ownership reform in China's township and village enterprises," Economic Systems, Elsevier, vol. 26(3), pages 249-269, September.
    10. Zou, Liang & Sun, Laixiang, 2000. "Liability Sharing as a Mechanism to Improve Firms' Investment and Liquidation Decisions," Journal of Comparative Economics, Elsevier, vol. 28(4), pages 739-761, December.
    11. Bo, Hong & Zhang, Zhihai, 2002. "The impact of uncertainty on firm investment: evidence from machinery industry in Liaoning province of China," Economic Systems, Elsevier, vol. 26(4), pages 335-352, December.
    12. Li, Shaomin & Xia, Jun, 2008. "The Roles and Performance of State Firms and Non-State Firms in China's Economic Transition," World Development, Elsevier, vol. 36(1), pages 39-54, January.
    13. Buckley, Peter J. & Wang, Chengqi & Clegg, Jeremy, 2007. "The impact of foreign ownership, local ownership and industry characteristics on spillover benefits from foreign direct investment in China," International Business Review, Elsevier, vol. 16(2), pages 142-158, April.
    14. Loren Brandt & Kevin Lim, 2020. "Accounting for Chinese Exports," Working Papers tecipa-680, University of Toronto, Department of Economics.

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