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Effects of Privatization on Exporting Decisions: Firm-level Evidence from Chinese State-owned Enterprises

Author

Listed:
  • Yasuyuki Todo

    (Graduate School of Frontier Sciences, The University of Tokyo, 5-1-5 Kashiwanoha, Kashiwa Chiba 277-8563 Japan.)

  • Tomohiko Inui

    (College of Economics, Nihon University, 1-3-2 Misakicho, Chiyada-ku, Tokyo, 101-8360, Japan.)

  • Yuan Yuan

    (Waseda Institute for Advanced Study, Waseda University, 1-104 Todukacho, Shinjuku-ku, Tokyo, 169-8050, Japan.)

Abstract

This paper examines whether privatizing Chinese state-owned enterprises increases the probability of exporting and, if so, what factors generate such an effect. Using firm-level data for the Chinese manufacturing sector for the 2000–2007 period, we find that privatization positively affects a firm’s productivity, size, and decision to export, whereas we find that it negatively affects the level of a firm’s long-term debt. We also find that Chinese firms are more likely to export when the productivity level, firm size, or the level of long-term debt increases. Taken together, these two sets of results suggest that privatization positively affects the likelihood that a firm will export by improving productivity and increasing firm size, whereas it negatively affects such a likelihood by lowering the long-term debt level of the firm. However, a quantitative analysis reveals that the effects of privatization that occur through these three channels are only slight. Therefore, we conclude that the positive effect of privatization on the likelihood of exporting is mainly the result of unobservable factors that are most likely related to changes in attitude about the profits and risks associated with privatization.

Suggested Citation

  • Yasuyuki Todo & Tomohiko Inui & Yuan Yuan, 2014. "Effects of Privatization on Exporting Decisions: Firm-level Evidence from Chinese State-owned Enterprises," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 56(4), pages 536-555, December.
    • Handle: RePEc:pal:compes:v:56:y:2014:i:4:p:536-555
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    Cited by:

    1. Wei Wei & Jianmin Tang, 2019. "Ownership transformation, firm performance and manufacturing growth in China," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 27(2), pages 475-496, February.
    2. 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.
    3. Yasuyuki Todo, 2016. "The effects of privatization on exports and jobs," World of Labour, LISER, pages 309-309, November.
    4. Qu, Hongyan & Ding, Zhujun & Ahlstrom, David & Wu, Changqi & Cai, Huifen Helen, 2025. "When I have to versus when I am able to: Behavioral and resource explanations for firms’ international expansion via exporting," International Business Review, Elsevier, vol. 34(1).

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