Effects of Privatization on Exporting Decisions: Firm-level evidence from Chinese state-owned enterprises

Author Name TODO Yasuyuki (Faculty Fellow, RIETI) / INUI Tomohiko (Economic and Social Research Institute) / YUAN Yuan (Waseda University)
Creation Date/NO. March 2012 12-E-015
Research Project East Asian Firm-Level Productivity Project
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This paper examines whether or not privatization of Chinese state-owned enterprises (SOEs) increases the probability of exporting, and, if so, what channels generate such effect. Using firm-level data for the Chinese manufacturing sector for the period 2000-2007, we find that privatization has a positive effect on exporting decisions, productivity, and firm size and a negative effect on firms' long-term debt. We also find that Chinese firms are more likely to engage in export when the productivity level, firm size, or long-term debt is larger. These two sets of results suggest that privatization has positive effects on exporting decisions through improving productivity and firm size and a negative effect through lowering debt. However, quantitative analysis reveals that effects of privatization through these three channels are small. Therefore, we conclude that the positive effect of privatization on exporting decisions comes mostly from other unobservable factors, most probably changes in attitude toward profits and risks associated with privatization.

Published: Yasuyuki Todo, Tomohiko Inui, Yuan Yuan, 2014. "Effects of Privatization on Exporting Decisions: Firm-level Evidence from Chinese State-owned Enterprises," Comparative Economic Studies, Vol. 56(4), pp. 536-555.