Strengthened State Capitalism: Nationalized Firms in China
Anders Johansson () and
Additional contact information
Xunan Feng: Shanghai University of Finance and Economics
Ying Wang: Peking University
No 2018-51, Stockholm School of Economics Asia Working Paper Series from Stockholm School of Economics, Stockholm China Economic Research Institute
We examine the nationalization of listed firms in China. Using a manually collected data set of 115 cases of ownership transfer from private to state control, we find that nationalization is positively associated with firm performance. When we analyze potential mechanisms through which nationalization may affect firm performance, we find a positive effect on benefits in the form of market power, government subsidies and bank financing. We also identify significant costs in the form of a higher tax burden, higher employment costs, and higher levels of corporate donations following nationalization. Finally, we show that weak local institutions exacerbate the influence nationalization has on firm performance and the benefits and costs tied to a shift to state control. These findings shed light on the effects when the government actively takes a more prominent role in the economy by becoming a controlling shareholder in large companies.
Keywords: Nationalization; Political economy; Firm performance; Local institutions; China (search for similar items in EconPapers)
JEL-codes: G32 G34 H11 P26 P31 (search for similar items in EconPapers)
Pages: 73 pages
New Economics Papers: this item is included in nep-bec, nep-cna and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
https://swopec.hhs.se/hascer/papers/hascer2018-051.1.pdf Full text (application/pdf)
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:hhs:hascer:2018-051
Access Statistics for this paper
More papers in Stockholm School of Economics Asia Working Paper Series from Stockholm School of Economics, Stockholm China Economic Research Institute Stockholm China Economic Research Institute, Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by NanHee Lee ().