Industry and Labour: Class Struggle at Work and Monopoly Capitalism; Social Standing in America: New Dimensions of Class; Class Structure and Social Mobility in Poland

A very well-established economic literature maintains that state-owned enterprises (SOEs) are inefficient as compared to privately owned ones (POEs). In this paper, I argue that SOEs' inefficiency is not due to state ownership per se, but is rather caused conditions other than ownership, to which SOEs often — though not necessarily always — relate. In particular, I focus on dynamic efficiency — specifically, the production of technological innovation — of SOEs in manufacturing industries, where SOEs should contend with POEs in a competitive environment. I suggest that targeted measures, which are aimed at increasing managers' commitment to long-term investment strategies and at reducing corruption and political interference — albeit complex and difficult to implement — can be much more (positively) impactful on long-run technical progress than the simple privatization of companies. This leaves room for exploration and implementation of policies that might reconcile state ownership and market competition in industrial sectors.     

China’s secondary privatization: new evidence on controlling shareholders tunnelling

This article utilizes the 2005 split-share structure reform (SSSR) in China as a natural experiment and conducts difference-in-differences (DID) tests to analyse corporate governance changes among Chinese SOEs compared to POEs. We show that tunnelling significantly reduced in both POEs and SOEs after the SSSR. More importantly, we find a significant and positive ‘privatization effect’ on SOEs’ tunnelling activities during the post-reform period suggesting the reductions of tunnelling were smaller among SOEs than POEs following the SSSR. In contrast, excess returns around the SSSR indicate that investors expected a negative ‘privatization effect’ on SOEs’ tunnelling. These findings suggest that the quality of corporate governance did not improve among SOEs as a result of the secondary privatization as the stock market expected without fundamental changes to firm ownership and control following the SSSR. The benefits of privatization accrue to the government controlling shareholders rather than minority investors.     

Corruption and privatization

This paper analyses the relation between corruption and privatization. In particular, we study how corruption affects the acquisition price and the post-privatization market structure. The model predicts that privatization in countries with highly corrupt government results in a higher degree of market concentration than in countries where governments are less corrupt. The acquisition price is also likely to be higher when a government is highly corrupt than when government officials are honest or moderately corrupt. Finally, and perhaps surprisingly, we demonstrate that a stronger propensity to embezzle state revenues may reduce government officials' benefits from corruption. The reason is that the more eager the government officials are to take bribes, the cheaper they are to buy.     

MASSIVE DIVESTITURE AND PRIVATIZATION LESSONS FROM CHILE

Between 1974 and 1989, the Chilean government privatized 550 state-owned enterprises (SOEs). Before 1974, all but a handful of major corporations were SOEs. About 50 of the largest enterprises privatized during the 1970s fell into government hands again, only to be re-privatized later. This was due partly to the economic and financial crisis affecting most Latin American countries during the early 1980s but also was a consequence of the privatization modes used. This paper analyzes that unique privatization experience so as to extract policy lessons. The analysis focuses on economic conditions, objectives of government policy, privatization modes, and the divestiture effects on employment, fiscal revenues, public sector wealth, spread of ownership, and capital market development.     

Domestic segment of global value chains in China under state capitalism

This paper studies the relationship between the changing domestic segment of global value chains and the return of state capitalism in China. To this end, we propose a method to estimate an extended input-output (IO) table that tracks inter-sector transactions between different types of firms in a domestic economy. The method is an application of constrained optimization, which relies on basic information from a country's national IO table, as well as sector- and firm-level data. We also propose a way to construct bootstrapped standard errors for any global value chain (GVC) measures estimated from the extended IO tables. We then use the extended IO table to study the domestic segment of GVC in China. We find that, not only is state-owned enterprises’ (SOEs) domestic value-added to gross exports ratio much higher than those of other firms, but it also increased significantly from 1.2 in 2007 to 1.7 in 2010. Our findings suggest that, even after years of privatization, SOEs still play an important role in shaping China's exports.     

Local Government Debt and Firm Leverage: Evidence from China

China's local government debt financing has been expanded aggressively to support infrastructure investment, especially since the enactment of four‐trillion‐yuan stimulus plan to stimulate the economy post global financial crisis. At the same time, the rapid increase of firm‐level leverage ratio of state‐owned enterprises (SOEs) and the decline of leverage ratio of non‐SOEs jointly deteriorated China's credit misallocation problem. In this study, we empirically test the effect of local government debton firm leverage in China. We find that an expansion of local government debt significantly crowded out the leverage of non‐SOEs, while crowded in that of SOEs. Moreover, the effect differed across industries and sectors.     

政府规模、市场化与地区腐败

Using a panel data at the provincial level during the period of 1989–2004, this paper examines the effects of social and economic factors such as government scale, privatization, openness, and education on regional corruption. Applying a fixed-effect model and IV estimation, we find that government size positively affects the incidence rate of corruption, and the effect becomes larger with the increase in the size of the core department of the government. 1% increase in the core department of the government leads to a 0.68%–1% increase in the number of corruption cases. While the proportion of FDI is positively associated with the corruption of regional officials, the ratio of the import and export trade to GDP is negatively associated with corruption. The impact of privatization on corruption is ambiguous. We also identify the significant impacts of the size and structure of the government expenditure on corruption. __________ Translated from Jingji Yanjiu 经济研究 (Economic Research Journal), 2008, (11): 16–26     

Does the mixed-ownership reform improve the productivity of state-owned enterprises? Evidence from companies listed in Chinese stock

The Chinese government initiated a new round of state-owned enterprise (SOE) reform in 2015 to improve SOE's performance with a focus on introducing multiple ownership shareholders and strategic partners, known as the mixed-ownership reform (MOR). This paper examines the policy effectiveness of the current MOR, an ongoing quasi-experiment, for listed SOEs’ productivity from 2011 to 2019 using a time-varying difference-in-difference (DID) approach. Overall, the total factor productivity (TFP) of SOEs selected as pilots by the government improved significantly by 14.57% after the reform compared to other SOEs, providing evidence for the positive role of the current MOR. This positive impact is prolonged and tends to increase in the post-reform years. A series of robustness checks show that our empirical specification satisfies the basic assumptions of DID and our findings are robust. By comparing the two reform strategies in the MOR, we find that the restructuring and reorganization plan is the primary channel driving TFP growth, showing a 0.4% improvement after the reform, rather than the employee stock ownership plan. We also investigate the impact of MOR on other financial and non-financial indicators, but we only find a significant increase in the profitability of SOEs’ assets.     

竞争、产权、公司治理三大理论的相对重要性及交互关系

对于国有企业与民营企业间的绩效差异,文献一般从三个理论角度进行研究:竞争、产权与公司治理。但是我们认为其中的各种观点都只强调了某一个方面而忽略了其他方面。本文采用世界银行对中国5大城市7个行业的700多家公司在1996—2001年运营情况的调查数据,分别从单因素效应、多因素效应以及它们之间的相互作用三个方面,对以上三个理论的相对重要性进行了实证研究。研究发现:(1)当分别对各单个因素进行考察时,各因素都对样本公司绩效有积极影响。然而当对这些因素进行综合考察时,我们发现产权结构与公司治理作用相对重要,而竞争效应则不甚显著;(2)在产权与公司治理,以及产权与竞争之间,存在着某种程度的替代性;(3)非国有企业在某些治理机制方面比国有企业显示出特定的优势,但另一方面市场竞争对于国有企业绩效影响大于对非国有企业的影响。研究表明,现有的理论观点都有其片面性,对企业绩效的全面的研究需要将三个理论体系结合起来进行综合考察。我们的研究将对中国正在推行的民营化浪潮,以及改善公司治理和完善市场竞争,都具有重要的政策指导意义。     

中国国有企业民营化绩效研究

本文研究中国国有企业民营化是否有效的问题。我们通过对国企民营化进程的考察来对此问题作出经验解答。根据世界银行一份对中国五个城市、覆盖六个行业的近300家国有企业(SOEs)1996—2001年间的调查数据,我们发现:(1)绩效较好的国有企业优先被民营化;(2)总体上来说,中国的民营化是富有成效的,尤其是提高了销售收入,降低了企业的成本,并最终导致企业盈利能力和生产率的大幅提高;而且在获得这些收益的同时并没有带来大规模的失业问题;(3)由民营机构控股、彻底民营化的企业比那些仍然是国有控股、部分民营化的企业绩效表现更好。     

Effect of political connections on corporate financial constraints: new evidence from privatization in China

Taking advantage of the SOEs privatization events in China, our research looks to identify the causal effect of political connections on corporate financial constraints. In a difference-in-differences framework, we demonstrate that after the transfer of control from state to private owners, privatized SOEs hoard more cash, save more cash from incremental cash flow, and exhibit higher cash flow sensitivity of investment.     

The role of state enterprises in the transition from command to market economies

In transition from command to market economies total privatization has proved to be impossible to achieve, and a substantial part of large enterprises are likely to remain in full or partial state ownership. Hasty privatization has in many cases even proved to be destructive. There is a need to reconsider the basic approach to transition. Contrary to conventional wisdom prevailing in mainstream economics state-owned enterprises (SOEs) are not necessarily inferior to private firms in economic efficiency. J. Kornai's soft-budget constraint is reconsidered. Two models are suggested under which SOEs may prove to be viable in the long run and serve to promote a smoother physical transition. Under Model One (which is the general case) SOEs are largely separated from the state and operate on the basis of profit maximization. Under Model Two (which applies to certain industries) different objective functions are chosen for purposes of economic efficiency. Finally, preserving SOEs is seen as an alternative means of reducing inequitable income distribution at the source where primary incomes are created.     

经济转轨、跨国公司进入与国有企业改革

任何转轨国家向市场经济过渡都要面临改革与开放的问题.因此,本文在经济开放的背景下,着重突出跨国公司与转轨国家之间经济的紧密联系,建立跨国公司、转轨国家政府、国内企业三者之间的混合寡占博弈模型,并以市场开放、自由化、私有化等政策变量作为影响转轨进程的外生变量,分析开放程度和经济调控手段以及跨国企业的投资策略等对转轨国家国有企业民营化进程和转轨国家国有企业竞争力的影响.研究表明,转轨国家在经济开放的条件下,对国有企业完全民营化并非是改革的最优方案,而对国有企业的部分民营化效果反而会更好,也符合社会福利最大化的原则.而税率、技术、转移价格等也是影响转轨国家社会福利和转轨国家企业产量和竞争能力的重要因素.     

The impact of privatization on efficiency and profitability

Over the past three decades, China has undergone tremendous economic and social change as a consequence of the transition from a centrally planned to a market economy. This paper examines a key feature of this transition – the privatization of the state‐owned enterprises (SOEs) – through both a theoretical model and empirical analysis. Using newly collected primary data from a variety of sources, we study how privatization of listed SOEs affects employment, wages, profits and other aspects of economic performance at the firm level. Our major finding is that privatization results in substantial downsizing of employment, increased labour productivity and rising profitability.     

Does Autonomy Matter in State Owned Enterprises? Evidence from Performance Contracts in India

Empirical evidence on the effect of managerial autonomy on the performance of state‐owned enterprises (SOE) is surprisingly scant despite autonomy being a preferred reform instrument over partial privatization in many countries. Using longitudinal data on performance contracts of state‐owned enterprises in India, this paper finds that managerial autonomy is associated with significant increases in enterprise profitability and efficiency. Further, using India's unique reform experience where both managerial autonomy and partial privatization were pursued side by side, the paper finds that while the positive effects of autonomy continue post‐partial privatization, the effects of partial privatization on performance are ambiguous. Specifically, once autonomy is controlled for, partial privatization has a positive effect on SOE profitability only after it crosses a critical level of government disinvestment. The findings suggest that organizational reforms such as granting managerial autonomy can be an important policy instrument in improving SOE performance particularly in cases where governments are unable to make substantial disinvestments.     

An efficient privatization mechanism

We consider the privatization of State-Owned Enterprises (SOEs) of which markets can be opened to competition once privatization takes place and competitors can compete successfully against them in a few years. The currently used “Revenue Maximization (RM)” scheme maximizes the government revenue from privatization but does not provide incentives for the privatized SOE to charge a price lower than the monopoly price until competition arises. We propose the “Welfare Maximization (WM)” scheme, which induces the privatized SOE to charge a competitive price without resorting to regulation. Also, WM provides greater incentives for post-privatization cost reduction.     

Privatization's impact on private productivity: The case of Brazilian iron ore

A major motivation for the recent wave of privatizations of state-owned enterprises (SOEs) was a belief that privatization would increase SOE productivity. There are now many studies showing most privatizations achieved this goal. Our theme is that the productivity gains from privatization are much more general and widespread than has typically been recognized in this literature. In assessing the productivity gains from privatization, the literature has only examined the productivity gains accruing at the privatized SOEs. But privatization may have significant impact on the private producers that often exist side-by-side SOEs. In this paper we show that this was indeed the case when Brazil privatized its SOEs in the iron ore industry. That is, after their privatization, the iron ore SOEs dramatically increased their labor productivity, but so did the private iron ore companies in the industry.     

The political economy of tariff protection in China: evidence from the WTO accession

We analyze China's tariff rates at WTO accession using a political economy approach. A model drawing on Branstetter and Feenstra ( 2002 ) is used to derive an optimal tariff rate for each industry. The model predicts that a government would set a high tariff rate if an industry is of large state‐owned enterprise (SOE) share, multinational share, or small foreign import share. From the model we reveal the Chinese government's preference towards different interest groups under the binding tariff constraint from the WTO commitments. The estimated structural parameters imply that the political weights on both the SOE profits and consumer income diminish with the economic opening. More important, the government still favours SOEs over consumer income. Our findings are consistent with the special features of China's economy.     

国有企业效率与退出选择——基于部分竞争性行业的经验研究

本文对2000-2008年期间中国部分竞争性行业国有企业的退出及其主要决定因素进行了研究。通过非平衡面板企业数据,在计算企业效率和界定不同退出行为的基础上,本文运用多项选择Logit模型分析发现,企业效率是决定国有企业退出的重要变量。其中,效率较高的企业更愿意选择民营化退出,而效率低的企业更有可能选择破产清算或打散重组的方式,完全退出国有部门。然而,在2000-2008年的后期,效率对于企业退出的影响程度明显降低。国有企业退出行为的变化,表明了在其背后政府目标的调整。     

Privatization in PolandWhat was the government trying to achieve?1

This article uses the sequencing of privatization to infer the objective pursued by the Polish government in the privatization of its large manufacturing firms in the second half of the 1990s. We construct a model of mixed oligopoly and use it to evaluate the privatization process; our analysis is based on the assumption that firms which furthered the government's objective function the most would be chosen to be privatized first. Based on the features of the firms that were chosen for early privatization, our empirical analysis suggests that welfare maximization was more important than the desire to maximize the revenues from privatization and the government's budget or to minimize employment losses.