China’s Decentralized Privatization and Change of Control Rights

Cheng-Gang Xu, Jie Gan and Yan Guo

No 11854, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: A distinct feature of China’s privatization is that its design and implementation are decentralized and administered by the local governments. Based on a proprietary survey dataset containing 3,000 firms in over 200 cities, this paper studies how city governments choose among various privatization methods, how these methods transfer control rights, and how they influence privatization outcomes. We find that less political opposition to labor downsizing and greater fiscal capacity prompt cities to choose direct sales to insiders (MBOs) as their privatization method. This method transfers the most control rights to private owners, retains the least government supports and is associated with most hardened budget constraints, restructure most effectively, and achieves the greatest performance improvement.

Keywords: Privatization; Chinese economy; Control rights; Restructuring (search for similar items in EconPapers)
JEL-codes: D22 D23 H19 L29 P31 P39 (search for similar items in EconPapers)
Date: 2017-02
New Economics Papers: this item is included in nep-tra
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://cepr.org/publications/DP11854 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:11854

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP11854

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().