A contractual analysis of state versus private ownership

We uniquely analyze the advantages and disadvantages of private ownership versus state ownership under various circumstances by focusing on three aspects: external risk, internal governance, and relative importance of owners versus managers. Our theoretical analysis indicates that private ownership is better than state ownership if the business environment is risky, corruption is limited, or the manager plays a more important role than the owner. Our empirical analysis supports our theoretical findings and reveals that better internal governance, more external risk and greater importance of the manager will magnify the benefits of privatization.     

The Roles of Corporatization and Stock Market Listing in Reforming China’s State Industry

This article provides an overview of China’s on-going efforts to reform its industrial state-owned enterprises (SOEs) through corporatization and stock market listing, and assesses the effects on the performance of these SOEs. It highlights changes, though limited, in both ownership pattern and corporate governance on the one hand, and rapid increase in concentration on the other as a result of these reform measures. It also explores the reasons why these changes have failed to significantly improve the performance of the SOEs, but have nevertheless paved the way for more complete privatization. The practical implications of these findings are also discussed.     

The effects of foreign ownership on competition in the banking industry: The key role of financial reforms

This study examines the impact of foreign ownership on bank competition and discusses whether the relation changes with various proxies of financial reform. We contribute to the extant literature by using the bank-level ratio of foreign ownership and applying five individual sub-indices of financial reforms from 50 countries. Within the emerging Asia and Middle East and North Africa (MENA) countries, our findings show that a higher ratio of foreign ownership in a bank can enhance competition, whereas a liberalization policy on banking supervision instead mitigates this positive relation between foreign ownership and competition. Conversely, the liberalization on bank privatization in Latin America and Sub-Saharan Africa (SSA) countries significantly increases competition. Thus, financial reforms do matter to the foreign ownership-bank competition nexus.     

Ownership structure and firm performance: Evidence from the Chinese corporate reform

We employ a new classification of ownership identity to analyze the impact of ownership structure on enterprise performance in China. Using both fixed effects model and Generalized Methods of Moments (GMM), this study finds that marketized state-owned enterprises outperform firms controlled by the government, indicating that partial privatization of state-owned Chinese firms improves corporate governance. Non-controlling large shareholders of marketized state-owned enterprises and private enterprises are found to play active roles in corporate governance. Lastly, there is evidence that ownership concentration of a controlling shareholder decreases the incentives to expropriate minority shareholders.     

中国民营化:“西学东渐”后的一种新范式

兴起于20世纪80年代的西方民营化改革已经成为席卷全球的浪潮,无论是资本主义国家还是社会主义国家都积极投身于民营化的实践之中,"可以说,民营化已超越党派偏好或意识形态,成为了一种务实的得到广泛应用的治理方式和公共服务模式",并分别形成了以英、美、奥为首的三种典范,且日益深刻影响到中国公共事业改革。但由于制度和文化背景的巨大差异,师从西方的中国民营化改革还没有显著的实践效果,因此,我们在学习和借鉴西方民营化经验和教训的同时,我们必须对自身固有的模式进行理性的探讨,辩证地看待民营化之于中国公共事业改革意义。     

我国民营企业企业主与职业经理人矛盾及其化解

目前中国民营企业所面临的困境之一就是大多数民营企业主和职业经理人的矛盾非常突出,因此尽快解决他们之间的不和谐问题显得非常重要。本文将从职业经理人、民营企业主以及外部环境这三个方面,分析、探讨民营企业主与职业经理人矛盾的具体表现及其原因;并提出解决此矛盾的方法,促进民营企业主与职业经理人关系的和谐发展。     

Against the mainstream: Nazi privatization in 1930s Germany1

Nationalization was particularly important in the early 1930s in Germany. The state took over a large industrial concern, large commercial banks, and other minor firms. In the mid‐1930s, the Nazi regime transferred public ownership to the private sector. In doing so, they went against the mainstream trends in western capitalistic countries, none of which systematically reprivatized firms during the 1930s. Privatization was used as a political tool to enhance support for the government and for the Nazi Party. In addition, growing financial restrictions because of the cost of the rearmament programme provided additional motivations for privatization.     

关于分配与所有制关系若干问题的思考

共同富裕,消除两极分化是社会主义改革区别于资本主义改革的试金石,也是邓小平的社会主义改革理论中的一个根本问题。正确评估中国贫富差距扩大的形势,促进分配关系的调整和社会公平是经济研究者的职责所在。贫富差距扩大最根本原因在所有制结构的变化,即所有制结构的"公降私升"已经达到影响公有制为主体的临界点,造成这种状况是干扰"公有制经济为主体"的"私有化"倾向。本文认为毫不动摇地发展包括私有经济在内的非公有经济,要以坚持公有制经济为主体、国有经济为主导作为前提,即实行两个毫不动摇,齐头并进,才能保证我国社会主义基本经济制度的巩固发展,永远立于不败之地。     

The assessment: public-sector investment

A combination of privatization and public-sector expenditureconstraints has given rise to a substantial reduction in public-sectorinvestment. Private ownership offers incentives for efficiencyin capital investment and forms of equity finance which areparticularly needed in developing countries. To avoid distortionsbetween public and private-sector investment, similar investmentcriteria should be employed in the two sectors. In particular,risk characteristics and premiums should be the same for equivalentprojects. However, in those areas where public ownership ismost relevant, namely natural monopolies, regulation is requiredand the private sector will not in general employ appropriateinvestment criteria. Furthermore, the private-sector cost ofcapital may be in excess of that of the public sector for distributionand interconnectedness reasons. Careful consideration needsto be given to institutional design to ensure that the private-sectorpotential is fully realized and to achieve efficiency in public-sectorinvestment where it is required. The paper points to a formof public ownership which has strikingly similar propertiesto regulated ownership and allows appropriate choices of investmentto be implemented.     

The effects of governance changes on bank efficiency in China: A stochastic distance function approach

China has accelerated banking reform since joining the Word Trade Organisation (WTO) in 2001. Employing a stochastic distance function approach, this paper examines bank technical efficiency and differentiates the static, selection and dynamic governance effects on bank efficiency for the 11-year period 1995–2005. The results show that bank efficiency has improved. Joint-stock ownership is associated with better performance in terms of profitability than state ownership (static effect). Strong selection effects are found for both foreign acquisition and going public reform strategies. Foreign acquisition may benefit domestic banks by efficiency gains in the long run, but privatization via initial public offerings (IPOs) appears to have only some short-term effects.     

Restructuring in China＇s State-owned Enterprises： Evidence from the Coal Industry

Usingfirm-level data for China ＂s state-owned coal mines, this paper examines the impact of privatization, corporatization and debt restructuring of state-owned enterprises on technical efficiency. A stochastic frontier production method is applied to a panel dataset from 2000 to 2007. The simultaneous study of these three measures makes it possible to study individual effects more precisely than otherwise. The study shows that the three reform initiatives are all able to improve technical efficiency in state-owned coal mines. The finding of a significant efficiency improvement from relinquishing state ownership provides an alternative to privatization. The study of debt restructuring and technical efficiency has not been documented in the published literature.     

论中国国有企业改革的逻辑

国有企业改革的逻辑在一定程度上昭示了未来改革的方向。三十年国企改革的逻辑包括：从放权让利到产权改革、从享受保护到“泯为众企”、从经营国有企业到管理国有资产,从中可以得到坚定不移地推进现代企业制度建设、将垄断企业推向市场以及继续完善国有资产管理制度的启示。     

Contracting out by the public sector: theory, evidence, prospects

Unlike privatization, contracting out (or simply 'contracting')does not generally involve the sale of publicly owned assets.Yet it has been widely used as a mechanism for reform of public-sectorservice provision. Contracting introduces ex-ante competition-competitionfor the market through competitive tendering. This article examinesboth the theory and evidence of contracting by the public sector.It considers the theoretical conditions, such as contractualincompleteness and the ownership pf physical assets, which mayimpede efficient contracting. It also reviews the internationalevidence which suggests that savings in the order of 20 percent are achievable, without sacrificing the quality of serviceprovided. In the UK, savings of between £240m and £280mhave been estimated for contracts let at the central governmentlevel. Substantial savings have also been generated by contractingat the local government level.     

Entrepreneurs' work experiences and the growth of Chinese private firms during the transition towards a market economy

This work sheds some light on the influence that entrepreneurs' previous work experiences exerted on the growth performance of Chinese private firms after the privatization reform in the early 2000s. Focusing on a representative and large sample of private firms, the analysis finds evidence of an inferior performance of the companies run by entrepreneurs with past top management experience in state-owned companies, while the superior performance of the companies run by entrepreneurs with prior technical experience. The study investigates specific theory-driven mechanisms through which different experiences impact firm performance, including time allocation and R&D management strategy. Upper echelon theory and imprinting effects appear relevant, and local institutions, political and economic uncertainty, and entrepreneurs' self-perception act as moderating factors. We deal with potential endogeneity issues with propensity score matching and two-stage least squares regression. These findings provide novel evidence on underexplored aspects of the ongoing privatization process in China and other economies in transition.     

What Does “Privatization” Do for Efficiency? Evidence from Argentina’s and Brazil’s Railways

Railway restructuring and privatization have now become a mainstream policy option in many developing countries. This paper provides the first analysis of the efficiency payoffs of railway reform for two developing countries, Argentina and Brazil. We track down the evolution of the performance of the private operators in both countries since reform, compare with the pre-reform performance when possible, distinguishing between the output and input sources of efficiency changes. This is done by computing the total factor productivity of each business unit since the regulators started collecting enough data.     

Determinants of privatization in China: The role of the presence of foreign firms

This study investigates how the presence of foreign firms in a sector influences the privatization policy of domestic firms in that sector in China. We consider several variables to proxy for such a presence, from the perspective of the relative production scale, R&D and marketing, and labor productivity. By using the enterprise surveys carried out by the World Bank in 2005 of nearly 12,400 Chinese firms located in over 100 cities, we find that a rise in the presence of foreign firms increases the extent of the private ownership of domestic firms in a nonlinear fashion. Additionally, we apply IV-Tobit estimation with valid instruments and Tobit estimation with lagged key variables to deal with the possible endogeneity in the relationship between the presence of foreign firms and the privatization decision. Empirical evidence supports the main findings.     

Making Negotiated Land Reform Work: Initial Experience from Colombia,Brazil and South Africa

The paper describes background, initial experience, and future challenges associated with a new “negotiated” approach to land reform. This approach has emerged as, following the end of the Cold War and broad macroeconomic adjustment, many countries face a “second generation” of reforms to address deep-rooted structural problems and provide the basis for sustainable poverty reduction and economic growth. It reviews possible theoretical links—through credit market or political channels—between asset ownership and economic performance. Program characteristics in each country, as well as lessons for implementation, and implications for monitoring and impact assessment are discussed.     

Why Privatize? The Case of Argentina's Public Provincial Banks

This paper analyzes detailed data on the pre- and post-privatization performance of publicly-owned provincial banks in Argentina. It estimates fiscal savings associated with privatization and describes the technical process that was used. The process included the creation of residual entities for the liabilities that private buyers found unattractive. The paper argues that the Fondo Fiduciario, which was created to convert the short-term liabilities of the residual entities into long-term obligations, helped make these privatizations politically feasible. Given the substantial number of state-owned banks in developing countries, this paper provides insight into the desirability and feasibility of future privatizations.     

A theory of privatization,or why bureaucrats are still in business

Privatization is a dynamic phenomenon, and changes in ownership arrangements require explanations based upon changes in background variables. Without movements in these variables bureaucrats are likely to stay in business, even if reform would increase efficiency. It is argued that changes in one such variable, the cost of government finance, have played a particularly significant role in trigerring privatizations and related reforms. The increasing cost of government finance, resulting from higher levels of general public expenditure and taxation, also explains the policy sequence, observed in many countries, in which comprehensive ownership reform is preceded by a period of increased financial stringency for state-owned enterprises (SOEs).     

The principles of privatization in Eastern Europe

Summary The paper surveys the choice criteria in selecting the mode of privatization. The main aspects are: 1. the sociological aspect with a longer time horizon, and in particular the objective to create a large class of business people; 2. economic aspects, and in particular the objective to increase efficiency and improve management; 3. political aspects and, 4. distributional-ethical aspects, including considerations of restitution and compensation for the loss of confiscated property. The paper discusses the role of the state and the evolutionary character of the privatization process, and analyzes various property forms. The significance of the evolution of personal owners gets special emphasis. Further subjects of the discussion are employee ownership, various forms of institutional ownership, give-away schemes of privatization and property rights of foreigners. Finally, the author explains his position concerning the speed of privatization.Fourth Tinbergen Lecture, delivered on October 19, 1990 in Utrecht for the Royal Netherlands Economic Association. The Hungarian text of the lecture was translated by Brian McLean, to whom I am grateful for his excellent work. I also thank Mária Kovács and Carla Krüger for their assistance in gathering the literature on the subject.