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Impacts of Privatization on Employment - Evidence from China

Author

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  • Lingwen Huang

    (China Center for Economic Research)

  • Yang Yao

Abstract

This paper evaluates the impact of privatization on firm employment using a panel dataset of 386 firms in China in the period 1995-2001. Controlling firm and year fixed effects, our panel regressions find that employment grows faster in privatized firms than in pure state-owned firms by a margin of 17.7 percentage points over the base year of 1995. We also study the dynamic impact of privatization on employment growth and find that the performance of privatized firms improves over time. These findings are robust even after we control other performance and financial variables as well as the pre-privatization employment history of privatized firms. In addition, we employ the difference-in-dffierence propensity score matching method to check the robustness of our results. The estimates cofinrm the regression-based results.

Suggested Citation

  • Lingwen Huang & Yang Yao, 2006. "Impacts of Privatization on Employment - Evidence from China," Microeconomics Working Papers 22045, East Asian Bureau of Economic Research.
    • Handle: RePEc:eab:microe:22045
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    References listed on IDEAS

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    1. Beirne, John & Liu, Guy S. & Sun, Pei, 2013. "The performance impact of firm ownership transformation in China," Working Paper Series 1598, European Central Bank.
    2. Bryson, Alex & Dorsett, Richard & Purdon, Susan, 2002. "The use of propensity score matching in the evaluation of active labour market policies," LSE Research Online Documents on Economics 4993, London School of Economics and Political Science, LSE Library.
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    Cited by:

    1. Lu, Susan Feng & Dranove, David, 2013. "Profiting from gaizhi: Management buyouts during China’s privatization," Journal of Comparative Economics, Elsevier, vol. 41(2), pages 634-650.
    2. Ghulam, Yaseen & Jaffry, Shabbar, 2015. "Efficiency and productivity of the cement industry: Pakistani experience of deregulation and privatisation," Omega, Elsevier, vol. 54(C), pages 101-115.
    3. Yang Yao, 2009. "The Disinterested Government: An Interpretation of China's Economic Success in the Reform Era," WIDER Working Paper Series RP2009-33, World Institute for Development Economic Research (UNU-WIDER).

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    More about this item

    Keywords

    Labor Demand; Comparison of Public and Private Enterprises; Privatization; Socialist Enterprises and Their Transitions; China;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • P31 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions

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