Impacts of Privatization on Employment - Evidence from China

Lingwen Huang and Yang Yao
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Lingwen Huang: China Center for Economic Research

Microeconomics Working Papers from East Asian Bureau of Economic Research

Abstract: This paper evaluates the impact of privatization on firm employment using a panel dataset of 386 firms in China in the period 1995-2001. Controlling firm and year fixed effects, our panel regressions find that employment grows faster in privatized firms than in pure state-owned firms by a margin of 17.7 percentage points over the base year of 1995. We also study the dynamic impact of privatization on employment growth and find that the performance of privatized firms improves over time. These findings are robust even after we control other performance and financial variables as well as the pre-privatization employment history of privatized firms. In addition, we employ the difference-in-dffierence propensity score matching method to check the robustness of our results. The estimates cofinrm the regression-based results.

Keywords: Labor Demand; Comparison of Public and Private Enterprises; Privatization; Socialist Enterprises and Their Transitions; China (search for similar items in EconPapers)
JEL-codes: J23 L33 P31 (search for similar items in EconPapers)
Date: 2006-01
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