Hostname: page-component-cd9895bd7-7cvxr Total loading time: 0 Render date: 2024-12-22T22:13:10.742Z Has data issue: false hasContentIssue false
  • English
  • Français

The Effects of Federalism on Productivity in Chinese Firms

Published online by Cambridge University Press:  02 February 2015

Sean M. Dougherty  and
Robert H. McGuckin
Sean M. Dougherty
Affiliation:
Organization for Economic Cooperation and Development, Paris
Robert H. McGuckin
Affiliation:
The Conference Board, USA
Get access Rights & Permissions [Opens in a new window]

Abstract

This study offers empirical evidence about how the structure of government and private ownership affected productivity in Chinese firms. It uses the microdata of China's last decennial industrial census, covering all of the 23,000 large and medium-sized industrial firms operating in China during 1995. The results show that government decentralization – ‘federalism’ – played an important role in improving the performance of not just collective firms, but also state-owned and mixed public/private ownership firms. This result is strongly confirmatory of much of the recent theoretical work on transition economies that posits a key role for government in the efficient operation of markets.

Keywords

decentralizationfederalismjurisdictionownershipproductivity联邦制管辖权分权所有制生产效率
Type
Articles
Information
Management and Organization Review , Volume 4 , Issue 1 , March 2008 , pp. 39 - 61
Copyright
Copyright © International Association for Chinese Management Research 2008

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Bardhan, P., & Mookherjee, D. 2000. Capture and governance at local and national levels. American Economic Review (Papers and Proceedings), 90: 135–139.Google Scholar
Bartelsman, E. J., & Doms, M. 2000. Understanding productivity: Lessons from longitudinal micro-data. Journal of Economic Literature, 38: 569–594.CrossRefGoogle Scholar
Blanchard, O., & Shleifer, A. 2001. Federalism with and without political centralization: China versus Russia. IMF Staff Papers, 48: 171–179.CrossRefGoogle Scholar
Cao, Y., Qian, Y., & Weingast, B. R. 1999. From federalism, Chinese style to privatization, Chinese style. The Economics of Transition, 7(1): 103–131.CrossRefGoogle Scholar
Che, J., & Qjan, Y. 1998a. Institutional environment, community government, and corporate governance: Understanding China's township-village enterprises. Journal of Law, Economics, and Organization, 14: 1–23.Google Scholar
Che, J., & Qian, Y. 1998b. Insecure property rights and government ownership of firms. Quarterly Journal of Economics, 113: 467–496.Google Scholar
Delios, A., Wu, Z. J., & Zhou, N. 2006. A new perspective on ownership identities in China's listed companies. Management and Organization Review, 2: 319–343.CrossRefGoogle Scholar
Dougherty, S. 1997. The reliability of Chinese statistics, Special Topic Report. Washington, D.C.: U.S. Department of Commerce. Available from URL: http://www.chinaonline.com/refer/statistics/secure/us_prc.asp.Google Scholar
Dougherty, S., & McGuckin, R. H. 2002a. Restructuring Chinese enterprises: Effects of federalism and privatization initiatives on business. New York: The Conference Board.Google Scholar
Dougherty, S., & McGuckin, R. H. 2002b. Federalism and the impetus for reform in China. China Law and Practice, 15(4): 30–34.Google Scholar
Dougherty, S., Herd, R., & He, P. 2007. Has a private sector emerged in China's industry? Evidence from a quarter of a million Chinese firms. China Economic Review, 18: 309–334.Google Scholar
Galal, A., & Shirley, M. 1995. Bureaucrats in business: The economics and politics of government ownership. The World Bank, New York: Oxford University Press.Google Scholar
Granick, D. 1990. Chinese state enterprises: A regional property rights analysis. Chicago, Ill: University of Chicago Press.Google Scholar
Groves, T., Hong, Y., McMillan, J., & Naughton, B. 1994. Autonomy and incentives in Chinese state enterprises. Quarterly Journal of Economics, 109: 183–209.Google Scholar
Gregory, N., Tenev, S., & Wagle, D. 2000. China's emerging private enterprises: Prospects for the new century. Washington, D.C.: International Financial Corporation. Available from URL: http://www.ifc.org/publications/china_private_ent.pdf.Google Scholar
Jefferson, G. H. 1999. Are China's rural enterprises outperforming state enterprises? Estimating the pure ownership effect. In Jefferson, G. H. & Singh, I. (Eds.), Enterprise reform in China: Ownership, transition, and performance: 153–170. The World Bank, New York: Oxford University Press.Google Scholar
Jefferson, G. H., & Singh, I. (Eds.) 1999. Enterprise reform in China: Ownership, transition, and performance. The World Bank, New York: Oxford University Press.Google Scholar
Jensen, J. B., & McGuckin, R. H. 1997. Firm performance and evolution: Empirical Regularities in the U.S. Microdata. Industrial and Corporate Change, 6: 25–47.Google Scholar
Kornai, J. 1980. Economics of shortage. Amsterdam: North Holland.Google Scholar
Li, D. 1996. A theory of ambiguous property rights in transition economies: The case of the Chinese non-state sector. Journal of Comparative Economics, 23: 1–19.Google Scholar
Li, S., Li, S., & Zhang, W. 2000. The road to capitalism: Competition and institutional change in China. Journal of Comparative Economics, 28: 269–292.Google Scholar
Li, P. P. 2005. The puzzle of China's township-village enterprises: The paradox of local corporatism in a dual-track economic transition. Management and Organization Review, 1: 197–224.Google Scholar
Litwack, J. M., & Qian, Y. 1998. Balanced or unbalanced development: Special economic zones as catalysts for transition. Journal of Comparative Economics, 26: 117–141.Google Scholar
McGuckin, R. H., Nguyen, S. V., Taylor, J. R., & Waite, C. A. 1992. Post-reform productivity performance and sources of growth in Chinese industry: 1980-85. Review of Income and Wealth, 38: 249–266.CrossRefGoogle Scholar
McGuckin, R. H., & Nguyen, S. V. 1993. Post-reform industrial productivity performance of China: New evidence from the 1985 industrial census. Economic Inquiry, 31(3): 323–341.CrossRefGoogle Scholar
de Mello, L., & Barenstein, M. 2002. Fiscal decentralization and governance: A cross-country analysis. In Abed, G. & Gupta, S. (Eds.), Governance, corruption, and economic performance: 333–365. Washington, D.C.: International Monetary Fund.Google Scholar
National Bureau of Statistics. 1993. Frequently used social and economic information categories and code standards. Beijing: Zhongguo Tongji Chubanshe. (In Chinese).Google Scholar
National Bureau of Statistics. 1996. Third national industrial census organization & implementation. Beijing: Zhongguo Tongji Chubanshe. (In Chinese).Google Scholar
National Bureau of Statistics. 1997. People's Republic of China third national industrial census materials. Beijing: Zhongguo Tongji Chubanshe. (In Chinese).Google Scholar
OECD (Organisation for Economic Co-operation and Development). 2000a. The OECD productivity manual, Paris: OECD.Google Scholar
OECD (Organisation for Economic Co-operation and Development). 2000b. China in the Global Economy: Reforming China's Enterprises. Finance & Investment/Insurance & Pensions, 2000(10): 1–129.Google Scholar
Oi, J. C. 1992. Fiscal reform and the economic foundations of local state corporatism in China. World Politics, 45: 99–126.Google Scholar
Oi, J. C. 1999. Rural China takes off: Institutional foundations of economic reform. Berkeley, Calif.: University of California Press.Google Scholar
Qian, Y., & Roland, G. 1998. Federalism and the soft budget constraint. American Economic Review, 88: 1143–1162.Google Scholar
Qian, Y., & Weingast, B. R. 1997. Federalism as a commitment to preserving market incentives. Journal of Economic Perspectives, 11(4): 83–92.CrossRefGoogle Scholar
Roland, G. 2000. Transition and economics: Politics, markets, and firms. Cambridge, Mass.: MIT Press.Google Scholar
Shirley, M., & Xu, C. 2001. Empirical effects of performance contracts: Evidence from China. Journal of Law, Economics and Organization, 17: 168–200.Google Scholar
Sun, J. 2000. State-oumed enterprises in China: Soft budget constraints and competition. Washington, D.C.: International Society for New Institutional Economics. Available from URL: http://www.isnie.org/ISNIE99/Papers/sun.pdf.Google Scholar
Tiebout, C. M. 1956. A pure theory of local expenditures. The Journal of Political Economy, 64: 416–424.CrossRefGoogle Scholar
Tybout, J. R. 2000. Manufacturing firms in developing countries: How well do they do, and why? Journal of Economic Literature, 38: 11–44.Google Scholar
Walder, A. 1995. Local governments as industrial firms: An organizational analysis of China's transitional economy. American Journal of Sociology, 101: 263–301.Google Scholar
Weingast, B. R. 1995. The economic role of political institutions: Market-preserving federalism and economic development. Journal of Law, Economics and Organization, 11(1): 1–31.Google Scholar
Wong, S. M. L., Opper, S., & Hu, R. 2004. Shareholding structure, de-politicization and firm performance: Lessons from China's listed companies. Economics of Transition, 12: 29–66.CrossRefGoogle Scholar
Wu, Y. 1996. Productive performance in Chinese enterprises. New York: St. Martin's Press.Google Scholar
Xu, X., & Wang, Y. 1999. Ownership structure and corporate governance in Chinese stock companies. China Economic Review, 10: 75–98.CrossRefGoogle Scholar
Young, A. 2000. The razor's edge: Distortions and incremental reform in the People's Republic of China. Quarterly Journal of Economics, 115: 1091–1135.Google Scholar
Zhang, A., Zhang, Y., & Zhao, R. 2001. Impact of ownership and competition on the productivity of Chinese enterprises. Journal of Comparative Economics, 29: 327–346.Google Scholar