ESTIMATING PRODUCTIVITY DYNAMICS DURING INSTITUTIONAL CHANGE: AN APPLICATION TO CHINESE STATE OWNED ENTERPRISES 1980-1994

Patrick Walsh () and Peter McGoldrick

Economic Papers from Trinity College Dublin, Economics Department

Abstract: We estimate the productivity dynamics of 680 industrial Chinese State-Owned Enterprises (SOEs) between 1980 and 1994. During this time managerial autonomy over factor markets was introduced. The timing of autonomy varied across SOEs and take-up was an endogenous process: high-productivity SOEs where more likely to take managerial control. We allow for this by adapting an algorithm developed in Olley & Pakes (1996) in order to generate estimates of productivity dynamics that deal with both simultaneity and endogenous selection biases. Apart from offering a methodology to estimate productivity dynamics during endogenous institutional change, we demonstrate that SOEs in China obtained productivity gains from managerial autonomy over factor markets in the years before privatisation.

Date: 2005-08
New Economics Papers: this item is included in nep-eff, nep-pbe, nep-sea and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:tcd:tcduee:2000514

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