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A Theory of Partial Property Rights and the Illusion of State-Owned Enterprises

Sheng Hong ()
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Sheng Hong: Independent Scholar, Beijing, China

Man and the Economy, 2021, vol. 8, issue 1, 21-45

Abstract: China’s State-Owned Enterprises (SOEs) enjoy many special benefits. They do not turn over profits and rents to the state, they pay much less interests than other enterprises in their use of capital, they enjoy monopolistic power in the marketplace, incomes of SOE employees, including managers, are free of policy restrictions. Because these substantial interests are not transferrable to individuals, competition exists for them. Compared with executives of private enterprise, senior managers of SOEs are 94 times more likely of being convicted of a crime. High benefits enjoyed by senior managers of SOEs come with a great risk. Once the illusion of SOEs is punctured, SOE leaders with higher education and long-term visions may become the driving force of SOE reform.

Keywords: state-owned enterprises; partial property rights; SOE rent; Chinese economic reform; privatization (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1515/me-2021-0006

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