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

Author

Listed:
  • Sean M. Dougherty

    (The Conference Board)

  • Robert H. McGuckin

    (The Conference Board)

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.

Suggested Citation

  • Sean M. Dougherty & Robert H. McGuckin, 2001. "The Effect of Ownership Structure and Jurisdictional Governance on Productivity in Chinese Enterprises," Economics Program Working Papers 02-01, The Conference Board, Economics Program, revised Jan 2002.
    • Handle: RePEc:cnf:wpaper:0201
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    References listed on IDEAS

    as
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    Cited by:

    1. Peter Li, 2009. "The Duality of Crony Corruption in Economic Transition: Toward an Integrated Framework," Journal of Business Ethics, Springer, vol. 85(1), pages 41-55, March.
    2. David Greenaway & Alessandra Guariglia & Zhihong Yu, 2014. "The more the better? Foreign ownership and corporate performance in China," The European Journal of Finance, Taylor & Francis Journals, vol. 20(7-9), pages 681-702, September.
    3. Zhang, Yanlong, 2014. "From State to Market: Private Participation in China’s Urban Infrastructure Sectors, 1992–2008," World Development, Elsevier, vol. 64(C), pages 473-486.
    4. Wenjing Li & Ran Zhang, 2010. "Corporate Social Responsibility, Ownership Structure, and Political Interference: Evidence from China," Journal of Business Ethics, Springer, vol. 96(4), pages 631-645, November.
    5. Yanrui Wu, 2002. "Technical Efficiency and Its Determinants in Chinese Manufacturing Sector," Economics Discussion / Working Papers 02-15, The University of Western Australia, Department of Economics.
    6. Alfred Wong & Lu Wei & Dean Tjosvold, 2014. "Business and regulators partnerships: Government transformational leadership for constructive conflict management," Asia Pacific Journal of Management, Springer, vol. 31(2), pages 497-522, June.

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    More about this item

    Keywords

    China; productivity; privatization; ownership; decentralization; federalism; transition;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • P31 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions

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