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Recasting the Iron Rice Bowl: The Reform of China's State Owned Enterprises

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  • Daniel Berkowitz

Following the enactment of reforms in the mid-1990s China'’s state owned enterprises(SOEs) became more profitable. Using theoretical insights from Azmat, Manning andVan Reenen (2012) and Karabarbounis and Neiman (2014) and econometric methodsin De Loecker and Warzynski (2012) this paper fi…nds that SOE restructuring wasnevertheless limited. This is because SOE profi…tability gains in part re‡flect that theywere under less political pressure to hire excess labor and also their cost of capital felland their capital-labor elasticity of substitution generally exceeded unity. Moreover,SOE productivity lagged foreign and private firms.

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Paper provided by Department of Economics, University of Pittsburgh in its series Working Paper with number 5858.

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Date of creation: Jan 2016
Handle: RePEc:pit:wpaper:5858
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