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Can New Private Shareholders Help Improve SOEs' Total Factor Productivity? Evidence from the Chinese Listed SOEs

Author

Listed:
  • Huobao Xie

    (Economics and Management School, Wuhan University)

  • Weiwei Yang

    (Economics and Management School, Wuhan University)

  • Qingyuan Li

    (Economics and Management School, Wuhan University)

Abstract

Using entropy-balancing technique and difference-in-differences approach, this paper assesses impact of further privatization on SOEs' TFP. We find that SOEs' TFP significantly enhances following the introduction of new private shareholders, and this holds in particular for the SOEs who transfer a larger number of shares to new private shareholders and allow them to appoint top managers. We further show that the marginal productivity gains for SOEs with different extents of privatization are various, there are diminishing marginal benefits of further appointing top managers, but not so of further increasing private shares. Finally, we also explore some underlying mechanisms.

Suggested Citation

  • Huobao Xie & Weiwei Yang & Qingyuan Li, 2022. "Can New Private Shareholders Help Improve SOEs' Total Factor Productivity? Evidence from the Chinese Listed SOEs," Annals of Economics and Finance, Society for AEF, vol. 23(1), pages 23-62, May.
    • Handle: RePEc:cuf:journl:y:2022:v:23:i:1:xieyangli
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    More about this item

    Keywords

    New private shareholders; Total factor productivity; Entropy balancing; Difference-in-differences approach;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • P31 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions

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