IDEAS home Printed from https://ideas.repec.org/a/ucp/jlawec/doi10.1086-735434.html

The Effects of Privatization on Firm Productivity in China

Author

Listed:
  • Zhangkai Huang
  • Jinyu Liu
  • Guangrong Ma
  • Lixin Colin Xu

Abstract

We study the productivity effects of the world’s largest privatization program in China. Relying on a matching and difference-in-differences procedure, we find that privatizations robustly led to large productivity gains. Privatizations improved total factor productivity (TFP) by 13–15 percent, and this estimate is at the high end of the estimates obtained from other transitional countries. Further evidence suggests that productivity gains came from improvements in management quality. The positive effect of privatization on TFP was more pronounced among firms in more competitive industries, which suggests complementarity between competition and privatizations. Privatizations worked less well for large state-owned entities under the oversight of the central government. Our evidence suggests that the privatization program was a key contributor to China’s growth in previous decades.

Suggested Citation

  • Zhangkai Huang & Jinyu Liu & Guangrong Ma & Lixin Colin Xu, 2025. "The Effects of Privatization on Firm Productivity in China," Journal of Law and Economics, University of Chicago Press, vol. 68(4), pages 901-931.
    • Handle: RePEc:ucp:jlawec:doi:10.1086/735434
    DOI: 10.1086/735434
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/735434
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: http://dx.doi.org/10.1086/735434
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: https://libkey.io/10.1086/735434?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:jlawec:doi:10.1086/735434. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Journals Division (email available below). General contact details of provider: https://www.journals.uchicago.edu/JLE .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.