Can New Private Shareholders Help Improve SOEs' Total Factor Productivity? Evidence from the Chinese Listed SOEs

Huobao Xie (), Weiwei Yang () and Qingyuan Li ()
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Huobao Xie: Economics and Management School, Wuhan University
Weiwei Yang: Economics and Management School, Wuhan University
Qingyuan Li: Economics and Management School, Wuhan University

Annals of Economics and Finance, 2022, vol. 23, issue 1, 23-62

Abstract: Using entropy-balancing technique and difference-in-differences approach, this paper assesses impact of further privatization on SOEs' TFP. We find that SOEs' TFP significantly enhances following the introduction of new private shareholders, and this holds in particular for the SOEs who transfer a larger number of shares to new private shareholders and allow them to appoint top managers. We further show that the marginal productivity gains for SOEs with different extents of privatization are various, there are diminishing marginal benefits of further appointing top managers, but not so of further increasing private shares. Finally, we also explore some underlying mechanisms.

Keywords: New private shareholders; Total factor productivity; Entropy balancing; Difference-in-differences approach (search for similar items in EconPapers)
JEL-codes: D24 G32 P31 (search for similar items in EconPapers)
Date: 2022
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