Impact of ownership and competition on the productivity of Chinese enterprises

Exploring a new, firm-level data set, this paper attempts to quantify the effect of ownership and market competition on the productive efficiency and efficiency growth of Chinese industrial firms. Empirical results reveal a strong ownership impact on efficiency, with foreign-owned enterprises exhibiting the highest efficiency scores and state-owned enterprises exhibiting the lowest. However, while the degree of competition in export markets is positively associated with enterprise efficiency, no such association is found between domestic competition and productive efficiency. The ownership effect is robust to market competition and industry factors. Finally, state-owned enterprises showed on average a higher growth in technical efficiency than collective-owned enterprises during 1996 to 1998. (C) 2001 Academic Press.