Does Property Right Transformation Improve Township and Village Enterprises Performance？

I. Introduction The township and village-owned enterprises (TVE) in rural China have ever been both an engine of the Chinese economy and an important contributor to the success of Chinese economic reform. They were established by the township and village authorities in the 1980s to achieve three main purposes: to provide government revenue, to increase ruralresidents’ income, and to create employment opportunities for the tremendous rural surplus labor force. The extent of the achievements…

Does Property Right Transformation Improve Township and Village Enterprises Performance?

To date, few observations have been made about the performance improvement that resulted from the property right transformation of the collective‐owned township and village enterprises (TVE) in the middle of 1990s. Using data collected from a questionnaire survey on the privatized TVE and their employees, the present paper provides some empirical evidence about this topic, and the analysis suggests that property right transformation has had a positive impact on sample enterprises' performance, including business improvement, employment expansion, incremental investment and contributions to government revenues. The present study concludes that, from a transient viewpoint, the property right transformation has not distorted local governments' intentions to establish TVE in earlier years. (Edited by Xinyu Fan)