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Employee Ownership and Profit Sharing as Positive Factors in the Reform of Chinese State-Owned Enterprises

Author

Listed:
  • George K.Y. Tseo

    (Pennsylvania State University)

  • Hou Gui Sheng

    (Qingdao Institute of Chemical Technology)

  • Zhang Peng-zhu

    (Xian Jiaotong University)

  • Zhang Lihai

    (Qingdao Institute of Chemical Technology)

Abstract

The situation for China’s urban state workers has eroded in recent years as failing state-owned enterprises (SOEs) have closed in large numbers and those that remain solvent are cutting employee benefits. In this context, employee stock ownership and profit sharing should serve both firm and worker by providing capital for the former and greater job security and financial compensation for the latter. This theory was tested using data from traditional SOEs and SOEs that had undergone employee ownership (EO) reform in Shangdong province. Econometric modeling revealed a performance advantage due to EO reform. Employee participation in governance exhibited a negative relationship to performance but participation in management at the shop-.floor level was significantly positive.

Suggested Citation

  • George K.Y. Tseo & Hou Gui Sheng & Zhang Peng-zhu & Zhang Lihai, 2004. "Employee Ownership and Profit Sharing as Positive Factors in the Reform of Chinese State-Owned Enterprises," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 25(1), pages 147-177, February.
    • Handle: RePEc:sae:ecoind:v:25:y:2004:i:1:p:147-177
    DOI: 10.1177/0143831X04040105
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