The Effect of Ownership Structure and Jurisdictional Governance on Productivity in Chinese Enterprises

Sean Dougherty and Robert McGuckin
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Robert McGuckin: The Conference Board

No 02-01, Economics Program Working Papers from The Conference Board, Economics Program

Abstract: This study offers empirical evidence about how the structure of government and private ownership affects productivity in Chinese firms. It uses the microdata of China’s most recent decennial industrial census, covering all of the 23,000 large and medium industrial firms operating in China during 1995. The results show that government decentralization – “federalism” – plays an important role in improving the performance of not just collective firms, but also state-owned and mixed public/private ownership firms. This result is strongly confirmatory of much of the recent theoretical work on transition economies that posits a key role for government in the efficient operation of markets. Privatization makes a big difference in performance for firms administered at the federal level, especially state-owned enterprises. Private ownership also makes a large difference for wholly foreign-owned firms, nearly all located in special districts. In local jurisdictions, however, there is little difference in productivity across the various nonstate ownership types, supporting the argument that the regulatory environment played a critical role in successful business performance.

Keywords: China; productivity; privatization; ownership; decentralization; federalism; transition (search for similar items in EconPapers)
JEL-codes: D23 H73 K23 O14 P31 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2001-12, Revised 2002-01
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Published in Management and Organization Review, Vol. 4, No. 1, March 2008, pp. 39-61.

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http://www.conference-board.org/economics/workingpapers.cfm?pdf=E-0006-02-WP Revised version, 2002 (application/pdf)
http://www.isnie.org/ISNIE02/Papers02/dougherty.pdf Conference version, 2002 (application/pdf)

Related works:
Working Paper: The Effects of Federalism and Privatization on Productivity in Chinese Firms (2004)
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