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State-owned enterprise presence: Local spillovers

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  • Ouyang, Difei

Abstract

How can the state sector affect nonstate firms? The state sector can cause factor scarcity by occupying disproportionately abundant resources in a relatively closed economy. Frictional regional factor markets and sizeable geographical variations in the state sector make China ideal for studying this factor supply channel. We find that in cities with a strong presence of state-owned enterprises (SOEs), non-SOEs grow more slowly, especially in capital growth. This is more pronounced among financially constrained firms, inducing capital misallocation. Moreover, relative factor scarcity is compensated by higher productivity growth, especially among low-productivity firms. These results imply broad spillover effects of the state sector.

Suggested Citation

  • Ouyang, Difei, 2024. "State-owned enterprise presence: Local spillovers," China Economic Review, Elsevier, vol. 84(C).
    • Handle: RePEc:eee:chieco:v:84:y:2024:i:c:s1043951x24000038
    DOI: 10.1016/j.chieco.2024.102114
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    More about this item

    Keywords

    State-owned enterprise; Growth; Productivity;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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