What Causes Privatization? Evidence from Import Competition in China

• 成果类型: Article
• 署名作者: Hu, Qing; Li, Wenjing; Lin, Chen; Wei, Lai
• 署名单位: Renmin University of China; Jinan University; University of Hong Kong; Lingnan University
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2023.4847
• 发表日期: 2024
• 关键词: Privatization; State ownership; Product market competition; INNOVATION; investment and operational efficiency

摘要

In this paper, we identify product market competition as a driver of privatization. Using product market shocks caused by trade liberalization of China, which has the world's largest state sector, we find that subjecting state-owned enterprises (SOEs) to higher competition leads to an increase in private ownership. This response is strengthened when SOEs operate in industries with large technology or productivity gaps from those in the frontier economies or when SOEs impose large fiscal burdens on local governments. Our findings are consistent with politicians' incentives to boost economic growth for better career development and to shed burdens when rents decrease.