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Do China's State-Owned Enterprises Maximize Profit?

Author

Listed:
  • Chongwoo Choe

    (Department of Economics and Finance, La Trobe University)

  • Xiangkang Yin

    (Department of Economics and Finance, La Trobe University)

Abstract

The usual belief is that the China's state enterprise reform with contract management responsibility system has led state-owned enterprises to maximize profit. Nonetheless the poor performance of state-owned enterprises after the reform relative to other forms of enterprises remains a puzzle. As the existing explanations for this puzzle based on increased competition or soft budget constraint are not entirely satisfactory, the authors propose an alternative explanation based on the incentive aspect of the reform.

Suggested Citation

  • Chongwoo Choe & Xiangkang Yin, 1998. "Do China's State-Owned Enterprises Maximize Profit?," Working Papers 1998.07, School of Economics, La Trobe University.
    • Handle: RePEc:ltr:wpaper:1998.07
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    Cited by:

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    2. Bajona, Claustre & Kelly, David L., 2012. "Trade and the environment with pre-existing subsidies: A dynamic general equilibrium analysis," Journal of Environmental Economics and Management, Elsevier, vol. 64(2), pages 253-278.
    3. Yin, Xiangkang, 2001. "A dynamic analysis of overstaff in China's state-owned enterprises," Journal of Development Economics, Elsevier, vol. 66(1), pages 87-99, October.

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