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Firm Size, Technical Efficiency and Productivity Growth in Chinese Industry

Author

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  • YUK-SHING CHENG

    (Department of Economics, School of Business, Hong Kong Baptist University, H.K.)

  • DIC LO

    (Department of Economics, SOAS University of London, UK)

Abstract

Since the mid-1990s, China’s state leadership has adopted a policy of nurturing the competitiveness of large state-owned industrial enterprises. The implications of this policy have been a matter of debate in the literature. This paper seeks to provide some useful input into the debate. With a view of investigating into the potential of long-term development of large enterprises, we estimate the “sequential production technology†in computing the Malmquist productivity index for various size-groups of enterprises in Chinese industry. Our findings indicate that large enterprises did register the fastest productivity growth and improvement in technical efficiency in the 1994-97 period. It thus appears that large-scale, mainly state-owned Chinese enterprises have exhibited the potential of making noticeable improvements and the relevant state policy does have its justification.

Suggested Citation

  • Yuk-Shing Cheng & Dic Lo, 2004. "Firm Size, Technical Efficiency and Productivity Growth in Chinese Industry," Working Papers 144, Department of Economics, SOAS University of London, UK.
    • Handle: RePEc:soa:wpaper:144
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    References listed on IDEAS

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