Corporate structure, partial privatization, and wage inequality: Evidence from China's split share structure reform

Mong Shan Ee, Hamid Beladi and Chi-Chur Chao

Emerging Markets Review, 2024, vol. 61, issue C

Abstract: This paper examines the effects of privatizing China's state-owned enterprises (SOEs) on wage distribution and the welfare of the economy. Privatizing profitable SOEs can narrow wage inequality and improve welfare, and it is however accompanied by a business dynamism effect that can widen the skilled-unskilled wage gap. Using China's split share structure reform in 2005 as a quasi-natural experiment, we empirically demonstrate for profitable SOEs a positive relationship between partial privatization and wage gap. Our findings are consistent with the plan to wind down unprofitable SOEs that would not survive without government subsidies.

Keywords: SOEs; Privatization; Output subsidy; Firm entry; Wage gap (search for similar items in EconPapers)
JEL-codes: G30 G38 J31 L33 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:61:y:2024:i:c:s1566014124000633

DOI: 10.1016/j.ememar.2024.101168

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