Privatisation, state ownership and productivity:evidence from China


This paper examines the relationship between the transfer of ownership between the public and private sectors of Chinese industry, and its impacts on performance. We link ownership changes to productivity growth, and demonstrate that privatisation contributes significantly. We offer an extension that is generally ignored in the literature, in looking at firms that are taken back into state ownership, and evaluating the productivity growth effects of this. Further, we highlight the well-understood simultaneity problems, and demonstrate the hazard of ignoring the issue by comparing various estimators, including the modified control function approach. In general, the results stress the importance of allowing for such endogeneity when evaluating the productivity effects of ownership change.

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Divisions: College of Business and Social Sciences > Aston Business School > Economics, Finance & Entrepreneurship
College of Business and Social Sciences > Aston Business School > Aston India Foundation for Applied Research
College of Business and Social Sciences > Aston Business School
Additional Information: This is an Author's Accepted Manuscript of an article published in Driffield, N., & Du, J. (2007). Privatisation, state ownership and productivity: evidence from China. International journal of the economics of business, 14(2), 215-239. International journal of the economics of business © 2007 International Journal of the Economics of Business, Taylor & Francis, available online at:
Uncontrolled Keywords: China,ownership Change,productivity,Economics, Econometrics and Finance(all)
Publication ISSN: 1466-1829
Last Modified: 06 May 2024 07:07
Date Deposited: 13 Oct 2009 15:27
Full Text Link: http://www.tand ... 571510701344004
Related URLs: http://www.scop ... tnerID=8YFLogxK (Scopus URL)
PURE Output Type: Article
Published Date: 2007-07
Authors: Driffield, Nigel (ORCID Profile 0000-0003-1056-3117)
Du, Jun (ORCID Profile 0000-0002-0449-4437)



Version: Accepted Version

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