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How Does Privatization Work in China?

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  • Bai, Chong-En
  • Lu, Jiangyong
  • Tao, Zhigang

Abstract

Using a comprehensive panel data set of China’s state-owned enterprises, we investigate the impacts of privatization, of different time sequences and extent of non-state ownership, on social welfare and firm performance. Attention has been focused on the sources of gain in firm performance and the long-run impacts of privatization. It is found that the privatization of China’s state-owned enterprises was achieved with limited compromise on social welfare responsibilities, and significant gain in firm performance was obtained by motivating the management and reducing agency cost at the management level.

Suggested Citation

  • Bai, Chong-En & Lu, Jiangyong & Tao, Zhigang, 2007. "How Does Privatization Work in China?," MPRA Paper 6599, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:6599
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    References listed on IDEAS

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    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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