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The Performance of State-Owned Enterprises: New Evidence from the China Employer-Employee Survey

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  • Hong Cheng
  • Hongbin Li
  • Tang Li

Abstract

Drawing on data from a random sample of manufacturing firms collected in 2016 for the China Employer-Employee Survey (CEES), we examine differences in measures of productivity and financial returns between state-owned enterprises (SOEs) and private firms in China. The summary statistics show that labor productivity and total factor productivity are generally higher at SOEs than at private firms, but the productivity advantage of SOEs can mostly be explained by the higher levels of human capital of their workers, greater market power, and better management. Furthermore, SOEs’ advantage in productivity exists only in industries with higher SOE concentrations. In contrast, measures of financial returns—return on assets and return on equity—are lower for SOEs than for private firms. We believe that these results may reflect the fact that SOEs generally have easier access to capital, human capital, and markets than other types of firms in China.

Suggested Citation

  • Hong Cheng & Hongbin Li & Tang Li, 2021. "The Performance of State-Owned Enterprises: New Evidence from the China Employer-Employee Survey," Economic Development and Cultural Change, University of Chicago Press, vol. 69(2), pages 513-540.
    • Handle: RePEc:ucp:ecdecc:doi:10.1086/703100
    DOI: 10.1086/703100
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    Cited by:

    1. Li, Qing & Hu, Dezhuang & Li, Tang, 2022. "The innovation of family firms in China: New evidence from the China employer-employee survey," China Economic Review, Elsevier, vol. 72(C).
    2. Lim, King Yoong & Morris, Diego, 2022. "Thresholds in natural resource rents and state owned enterprise profitability: Cross country evidence," Energy Economics, Elsevier, vol. 106(C).
    3. Jiang, Kun & Wang, Susheng, 2022. "Internal labor markets with two types of promotion and two tiers of salary: theory and evidence from China," China Economic Review, Elsevier, vol. 72(C).

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