Enterprise Productivity and Efficiency: When Is Up Really Down?

A substantial body of literature has documented impressive total factor productivity (TFP) growth in China's state-owned enterprises (SOEs) during the period of China's enterprise reform. Such growth rates have been used to support the view that China's reforms of SOEs have been highly successful. In this paper, we question the validity of using TFP growth rates as a “bottom line” measure of performance. In the spirit of a counterexample, we use a simple model to show that when firms are not profit maximizers for whatever reason, higher productivity may actually lead to greater allocative distortion, lower profits, and lower economic efficiency. On the basis of existing evidence, we argue that these conditions held for many Chinese state enterprises during the reform.J. Comp. Econom.,June 1997,24(3), pp. 265–280. Boston College, Chestnut Hill, Massachusetts 02167; University of Michigan, Ann Arbor, Michigan 48109-1220; and Industrial Relations Center, Carlson School of Management, University of Minnesota, 271 19th Ave. S., Minneapolis, Minnesota 55455.     

Privatization Methods and Productivity Effects in Romanian Industrial Enterprises

Comprehensive panel data on privatization transactions and labor productivity in Romanian industrial corporations are used to describe the postprivatization ownership structure and to estimate the effect of Romania's diverse privatization policies on firm performance. The econometric results show consistently positive, highly significant effects of private ownership on labor productivity growth; the point estimates imply an increased 1.0 to 1.7% growth for a 10% rise in private shareholding. The strongest estimated impacts are associated with sales to outside blockholders; insider transfers and mass privatization are estimated to have significantly smaller, although still positive, effects on firm performance. J. Comp. Econ., December 2002, 30(4), pp. 657–682. Upjohn Institute for Employment Research, Central European University; and Budapest University of Economic Sciences, Central European University. © 2002 Association for Comparative Economic Studies. Published by Elsevier Science (USA). All rights reserved.Journal of Economic Literature Classification Numbers: G32, G34, L32, L33, P20, P31.     

The impact of OFDI on the performance of Chinese firms along the ‘Belt and Road’

ABSTRACT

Using feasible generalized least squares (FGLS) and ordinary least square (OLS) estimations on a dataset of 1208 outward Foreign Direct Investment (OFDI) events by Chinese-listed firms from 2004 to 2015, this paper investigated the impact of OFDI on the performance of Chinese firms, from which it was found that Chinese firms that had invested in Belt and Road Initiative (BRI) countries were more productive than those that had invested in non-BRI countries. However, OFDI by both state-owned enterprises (SOE) and non-SOE were on average found to be negatively related to productivity and profitability, with state-owned enterprises (SOEs) having worse performance in terms of total factor productivity (TFP) than non-SOEs. A further subsample analysis found that Chinese firms that were investing in developing economies were performing better than those that had invested in developed ones; firms investing in sub-regions like Middle East and South Africa, East Asia and the Pacific, Latin America and the Caribbean experienced a positive post-OFDI TFP but investment in other regions had either insignificant or negatively significant coefficients, indicating that firms in general had poor post-OFDI performances. The findings in this paper are informative for developing going-global strategies for both firms and government authorities.     

The impact of China's millennium labour restructuring program on firm performance and employee earnings1

Around the turn of the century, China experienced perhaps the largest labour restructuring program in the world. This paper uses a new dataset of Chinese industrial enterprises to examine what leads to downsizing, and tries to understand the effects of labour downsizing on firms’ technical efficiency, financial performance and employee wages. We find that downsizing is more prevalent in state‐owned enterprises (SOEs), and is more likely when enterprises are older, larger and have higher excess capacity. For both SOEs and private firms, downsizing is more likely when the prices of their products drop, but private firms respond more dramatically. Moreover, downsizing has serious short‐term costs in terms of total factor productivity (TFP). For mild downsizing, private firms suffer more deterioration in productivity. The distribution of surplus after downsizing is more favourable to labour in SOEs. For severe downsizing, both SOEs and private firms exhibit lower TFP growth with similar magnitudes. Our findings imply that private firms emphasize profit goals, while SOEs place a greater weight on labour protection.     

Efficiency Wages and Work Incentives in Urban and Rural China

This paper examines incentive-wage effects for production and for managerial/technical workers in both urban and rural Chinese nonagricultural enterprises. We report strong evidence of productivity-enhancing wage behavior among enterprises in all ownership categories. There is also evidence that firms paying higher efficiency wages experience less shirking among their employees. We find that the profit-maximizing potential of incentive-wage setting is not fully exploited, although there is weak evidence that joint ventures come closer to profit-maximizing behavior at this margin of wage/employment behavior than do collectives or state-owned enterprises. J. Comp. Econ., December 2001, 29(4), pp. 645–662. The Ohio State University, 1945 North High St., Columbus, OH 43210 and University of Hawaii at Manoa, Honolulu, Hawaii 96822. © 2001 Elsevier ScienceJournal of Economic Literature Classification Numbers: P23, J31, O15.     

Productivity Catch‐up Between Chinese and Taiwanese Electronics Firms

This paper aims to depict the patterns of China's productivity catch‐up with Taiwan in the electronics industry over the period 2001–2007. Specifically, we investigate the roles that ownership structure and innovation efforts play in the dynamics of the productivity gap. The firm‐level evidence suggests that the labour productivity gap between Chinese and Taiwanese electronics firms has narrowed during the past decade. Second, the narrowing of the labour productivity gap has occurred in foreign‐owned enterprises rather than in local firms. Examining the determinants of productivity catch‐up show that R&D significantly contributes to Chinese electronics firms' catching up with their Taiwanese counterparts.     

A healthy hybrid: The technological dynamism of minority-state-owned firms in China

Since its economic reform began in 1979 China's economy has grown rapidly but its dynamism has not been shared by the state-owned enterprises (SOEs) at its core. Although some progress has been made, a large proportion of SOEs remain inefficient and uncompetitive, failing to exploit their advantages in scale, experience and resources. In contrast there has been rapid growth first of the collective and township enterprises, and then of the private sector, now the largest ownership type. However, private businesses continue to be handicapped by poor access to finance and other resources. These have however been made freely available to firms with only a minority state shareholding and otherwise owned by private shareholders and employees. This paper, focussing on the telecoms manufacturing sector, compares minority-state-owned hybrids favourably with other ownership types and argues that in the Chinese setting they can and should play a key role in future development.     

市场化进程、国企改革策略与公司治理结构的内生决定

本文以2001年至2003年间中国地方政府控制的上市公司为对象,考察了各地区市场化进程差异以及中央政府基于公司规模和行业特征采取的"抓大放小"和"战略调整"的国企改革策略对公司最终控制人政府级别、政府持股比例以及政府持股方式的影响。研究发现:在市场化进程越快的地区,上市公司更可能由低级别地方政府控制、政府持有股权比例更低;并且,大规模公司、管制性行业公司更可能由高级别地方政府控制、政府持有股权比例更高。但在政府持股方式上,市场化进程的影响并不稳定,而大规模公司由政府直接持股的可能性更小,并且管制性行业与非管制性行业公司无显著区别。这些结果表明,地区市场化进程以及中央政府采取的国企改革策略对公司治理结构的形成具有重要影响(主要体现在政府级别和持股比例上)——地区市场化进程减轻了地方政府控制公司的经济动机,而国企改革策略使得地方政府具有控制大规模公司和管制性行业公司的政治动机。上述结论在剔除深圳和上海地区公司以减轻样本特殊性问题、采用工具变量法以减轻内生性问题以及一系列稳健性检验后仍成立。     

企业出口之动态效应研究-来自中国制造业企业的经验:2001-2007

本文对中国企业的出口选择及其学习效应进行研究。结果表明:中国同样存在优质企业做出口的现象;出口会迅速实现企业的规模扩张;出口企业通过出口学习会给企业带来生产率的短期提高,而后出现动态衰减。我们的研究启示是:依附低端制造和外生出口贸易中介的中国企业,通过进入国际市场虽然取得了规模上的快速扩张,但在效率提升上却收获甚微,动态地来看,中国做出口的优质企业可能会演变为更劣质的企业。     

PRIVATIZATION IN CHINA: TECHNOLOGY AND GENDER IN THE MANUFACTURING SECTOR

This paper examines the impact of privatization on gender discrimination in China across firms with different technology intensities. Using a comprehensive firm‐level survey, the paper identifies gender wage‐productivity differentials by directly estimating the relative productivity levels of workers from the production function of firms. The panel structure of the survey is taken advantage of by following firms that were fully state‐owned in the initial year, and distinguishing them from firms that were later privatized. The main results show that privatization was associated with an increase in relative productivity of female workers in high technology industries, and a reduction in relative productivity of female workers in low technology industries. Time varying coefficient results suggest that the improvements in gender outcomes in high technology industries may not be maintained in the long run as the relative wage and productivity ratios tend to deteriorate, potentially due to low supply of highly educated female workers. At the same time, outcomes in privatized low technology industries increase over time, lowering the wage and productivity gaps between male and female workers. (JEL J16, J31, P20)     

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。     

企业金融化、高管股权激励与研发投资

以2010-2015年沪深584家A股上市公司为样本,从产权异质性角度考察企业金融化、高管股权激励与研发投资关系。研究发现:①非货币金融资产持有比例与研发投资呈负相关,反映企业金融化对研发投资具有挤出效应,且高管股权激励能弱化企业金融化与研发投资的负向关系。挤出效应和弱化效应在投资性金融资产上体现非常明显,而在交易类金融资产上体现不明显;②与非国有企业相比,非货币金融资产的挤出效应和高管股权激励的弱化效应在国有企业中表现更为显著。投资性金融资产的挤出效应在国有企业中较为显著,而在非国有企业中不太显著,但高管股权激励的抑制作用在国有或非国有企业均较为明显。不论产权异质性,交易类金融资产的挤出效应和高管股权激励的抑制作用均不显著。     

A Multitask Theory of State Enterprise Reform

During transition, maintaining employment and providing a social safety net to the unemployed are important to social stability, which in turn is crucial for the productivity of the whole economy. Because independent institutions for social safety are lacking and firms with strong profit incentives have little incentive to promote social stability due to its public good nature, state-owned enterprises (SOEs) are needed to continue their role in providing social welfare. Charged with the multitasks of efficient production as well as social welfare provision, SOEs continue to be given low profit incentives, and consequently their financial performance continues to be poor.J. Comp. Econom., December 2000, 28(4), pp. 716–738. The University of Hong Kong, Hong Kong, and WDI; Hong Kong University of Science and Technology, Hong Kong, CEPR, and WDI; The University of Hong Kong, Hong Kong; University of Minnesota, Minneapolis, Minnesota 55455, CEPR, and WDI.     

Does bank shareholding impact corporate innovation? Evidence from China

Corporate innovation is an engine of economic development, while bank shareholding is the phenomenon of having a bank as a shareholder. Their relationship, however, has been underexamined. We provide the first study on the direct impact of bank shareholding on corporate innovation. Using patents granted to Chinese firms from 1999 to 2013, our findings suggest that bank shareholding significantly contributes to corporate innovation. Additional analysis suggests that easing financial constraints can facilitate the positive impacts of bank shareholding on corporate innovation. We also find that bank shareholding works better when firms have effective external monitoring and when they are nonstate-owned firms with nonstate-owned banks as shareholders. We contribute to the literature by showing that (1) despite the restrictions some countries impose on bank shareholding, allowing it could be a good economic policy for promoting corporate innovation, and (2) successful corporate innovation requires proper monitoring and incentives.     

Going Multinational: What are the Effects on Home‐Market Performance?

Abstract. This paper compares the home‐market performance of German multinational enterprises (MNEs) and national firms, both before and after switching from national to multinational activities. Regarding the former case, our results show that future multinationals outperform domestic firms. When assessing the ex post performance of multinationals, selectivity issues must be taken into account. Applying an endogenous treatment model, it turns out that after switching, both productivity and wage growth are higher at newly founded MNEs. While capital intensities increase compared with those of national firms, employment growth rates are negatively related to switching, suggesting that home and foreign employment are substitutes.     

Institutional environment,ownership and firm taxation

This paper examines how ownership type and institutional environment affect firm taxation. Using a sample of Chinese‐listed firms from 1999 to 2006, we find that private firms enjoy a lower effective tax rate than local state‐owned enterprises. In addition, the preferential taxation of private firms is associated with local government incentives to promote local economic growth. We find that private firms located in regions with a lower level of privatization receive preferential tax treatment. Our results also suggest that decentralization and interjurisdictional competition lead to financial interdependence between local governments and private firms.     

How Much do Technological Gap,Firm Size,and Regional Characteristics Matter for the Absorptive Capacity of Italian Enterprises?

The absorptive capacity—the ability of enterprises to efficiently absorb and internalise knowledge from outside sources—represents the link between firms’ capabilities to implement new products and the external stock of technological opportunities, such as those gleamed from Multinational Enterprises (MNEs). This paper explores whether the effect of foreign direct investment (FDI) on the productivity of Italian domestically-owned firms (DOFs) is dependent on their absorptive capacity. In particular, given the peculiar characteristics of the Italian productive system, our analysis focuses on three different dimensions of the absorptive capacity: the size of the technological gap between foreign-owned firms (FOFs) and DOFs, firm size, and the regional distribution of firms. Our findings suggest that technological gap and firm size matter considerably for the spillover effect. Moreover, spillovers exhibit a sub-national dimension present only in the northeastern region of the peninsula.     

Intra‐firm trade,exporting, importing,and firm performance

Abstract This paper examines firm heterogeneity in terms of size, wages, capital intensity, and productivity between domestic and foreign‐owned firms that engage in intra‐firm trade, firms that export and import, firms that import only, and firms that export only. As previously documented, heterogeneity between different groups of trading firms is substantial. Taking into account intra‐firm trade in addition to exporting and importing yields new insights into the productivity advantage previously established for exporting firms. The results presented here show that this premium accrues only to exporters that also import and to exporters that also engage in intra‐firm trade, but not to firms that export only. Using simultaneous quantile regressions, the paper illustrates that heterogeneity within different groups of trading firm is equally large. Some of this within‐group heterogeneity can be attributed to differences in trading partners.     

Politician control, agency problems and ownership reform

Using data from a recent national survey on the ownership reform of state‐owned enterprises in China, we study the effects of reducing politician control and agency problems on a number of reform outcomes. Taking into account the endogenous nature of the reform, we find that these outcome measures of the reform's success are positively affected by the lessening of politician control through increasing the firm's flexibility in labour deployment and by the mitigation of agency costs through the introduction of more effective corporate governance mechanisms such as one‐share one‐vote and shareholding‐based board structure composition. Ownership structure also matters: relative to shareholding by the state, foreign ownership has a positive effect on reform outcomes; individual (mostly employee) shareholding has a negative or insignificant effect. Somewhat surprisingly, operating autonomy (excluding labour deployment flexibility) has a negative effect on firm performance, suggesting serious agency problems in the reformed enterprises.     

Executive shareholding,compensation, and analyst forecast of Chinese firms

We examine the impact of executive and leadership shareholding and cash compensation on analyst forecast error and dispersion as proxies for information asymmetry. We find that firms pay higher compensation (or excess compensation) to executives and directors are associated with higher information asymmetry. The positive association is stronger where executives’ and directors’ shareholdings are higher. Shareholding appears to facilitate managerial entrenchment and gives highly paid executives/leadership stronger structural power which adversely affects information disclosure leading to larger forecast error and dispersion. These results are robust to different measures of compensation and alternative models controlling for the predictability of firm-level earnings. Our findings indicate that executive/director shareholding and compensation do not provide sufficient incentives for information disclosure by Chinese firms.