How Does Government Ownership Affect Firm Performance? Evidence from China's Privatization Experience
Wilson H. S. Tong and
Additional contact information
Qian Sun: Nanyang Technological University, Singapore,
Journal of Business Finance & Accounting, 2002, vol. 29, issue 1&2, 1-27
The effect of government ownership on firm performance remains a controversial issue, especially in a transitional economy like China. Government ownership is typically viewed as adversely affecting firm performance. This study of that of Mainland China's privatization experience indicates the opposite. No matter whether it is in the form of state ownership or legal person ownership, government ownership has a positive impact on partially privatized state-owned enterprises. However, this relationship is nonlinear and shows an inverted U-shape. Given the situation of highly indebted, non-performing state-owned enterprises, we argue that too much government control is indeed bad for enterprises. But too little government ownership may not be good either. It might mean a lack of the government's political support and business connections, which are valuable and necessary to vitalize performance. Copyright Blackwell Publishers Ltd 2002.
References: Add references at CitEc
Citations: View citations in EconPapers (61) Track citations by RSS feed
Downloads: (external link)
http://www.blackwell-synergy.com/doi/abs/10.1111/1468-5957.00422 link to full text (text/html)
Access to full text is restricted to subscribers.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bla:jbfnac:v:29:y:2002:i:1&2:p:1-27
Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0306-686X
Access Statistics for this article
Journal of Business Finance & Accounting is currently edited by P. F. Pope, A. W. Stark and M. Walker
More articles in Journal of Business Finance & Accounting from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().