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State capitalism, economic systems and the performance of state owned firms

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  • Estrin, Saul
  • Liang, Zhixiang
  • Shapiro, Daniel
  • Carney, Michael

Abstract

In this paper, we pursue two related research questions. First, we enquire whether state owned enterprises (SOEs) perform better than privately owned firms in a large variety of emerging markets. To test this, we develop a unique dataset using firm-level data from the World Bank Enterprise Survey (WBES), resulting in a sample of over 50,000 firms from 57 understudied countries including emerging capitalist, former socialist and state capitalist ones. Our results suggest that SOEs do display productivity advantages over private firms in these understudied economies. Our second research question asks whether the performance of state-owned firms in these understudied countries is context specific, namely whether performance depends on the institutional system to which a country is classified. We refer to these systems as configurations. In particular, we are interested in whether state owned firms perform better in “state capitalist” countries including China and Vietnam. We find empirical support for the argument that the “state led” configuration provides better institutional support for the ownership advantages of SOEs than others.

Suggested Citation

  • Estrin, Saul & Liang, Zhixiang & Shapiro, Daniel & Carney, Michael, 2018. "State capitalism, economic systems and the performance of state owned firms," LSE Research Online Documents on Economics 91944, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:91944
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    File URL: http://eprints.lse.ac.uk/91944/
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    References listed on IDEAS

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    1. Evguenia Bessonova & Ksenia Gonchar, 2022. "Can the Growth of Competitive Pressure and Hardening of Budget Constraints Reduce the Efficiency Loss due to State Ownership?," Russian Journal of Money and Finance, Bank of Russia, vol. 81(3), pages 22-53, September.

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    More about this item

    Keywords

    comparative economic systems; state ownership; varieties of institutional systems (VIS); firm performance;
    All these keywords.

    JEL classification:

    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations
    • P31 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions
    • P5 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems

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