[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/ete/revbec/20040405.html
   My bibliography  Save this article

Privatization. Issues at Stake in the Case of China

Author

Listed:
  • Qi Quan
  • N. Huyghebaert
Abstract
This paper reviews the theory and recent empirical studies on privatization, with a special focus on the efforts made in the case of China. Over the last decade, the Chinese government has initiated major privatizations in an attempt to promote more efficiency and improve the financial and operating performance of state-owned enterprises. Despite the great variation in perspectives and adopted methodology, studies on privatization mainly address the following two questions: why to privatize and how to privatize? Also, there is a huge literature on the post-privatization performance of these firms. While privatization has improved the performance of most SOEs worldwide, our data suggest that it does not work very well in the case of China.

Suggested Citation

  • Qi Quan & N. Huyghebaert, 2004. "Privatization. Issues at Stake in the Case of China," Review of Business and Economic Literature, KU Leuven, Faculty of Economics and Business (FEB), Review of Business and Economic Literature, vol. 0(4), pages 647-687.
    • Handle: RePEc:ete:revbec:20040405
    as

    Download full text from publisher

    File URL: https://lirias.kuleuven.be/bitstream/123456789/85621/1/TEM_4-04_06_QI%2520QUAN.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Andrei Shleifer, 1998. "State versus Private Ownership," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 133-150, Fall.
    2. Berglof, Erik & Roland, Gerard, 1998. "Soft Budget Constraints and Banking in Transition Economies," Journal of Comparative Economics, Elsevier, vol. 26(1), pages 18-40, March.
    3. Shleifer, Andrei & Vishny, Robert W, 1997. "A Survey of Corporate Governance," Journal of Finance, American Finance Association, vol. 52(2), pages 737-783, June.
    4. Chan, Kalok & Wang, Junbo & Wei, K. C. John, 2004. "Underpricing and long-term performance of IPOs in China," Journal of Corporate Finance, Elsevier, vol. 10(3), pages 409-430, June.
    5. David E. M. Sappington & Joseph E. Stiglitz, 1987. "Privatization, information and incentives," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 6(4), pages 567-585.
    6. Shleifer, Andrei & Vishny, Robert W, 1986. "Large Shareholders and Corporate Control," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 461-488, June.
    7. G. M. Chen & Bong‐Soo Lee & Oliver Rui, 2001. "Foreign Ownership Restrictions And Market Segmentation In China'S Stock Markets," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 24(1), pages 133-155, March.
    8. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    9. Patrick Bolton, 1995. "Privatization and the separation of ownership and control: lessons from Chinese enterprise reform," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 3(1), pages 1-11, March.
    10. Cyril  Lin, 2000. "Corporatisation and Corporate Governance in China’s Economic Transition," Economics Series Working Papers 20, University of Oxford, Department of Economics.
    11. Megginson, William L & Nash, Robert C & van Randenborgh, Matthias, 1994. "The Financial and Operating Performance of Newly Privatized Firms: An International Empirical Analysis," Journal of Finance, American Finance Association, vol. 49(2), pages 403-452, June.
    12. Qi, Daqing & Wu, Woody & Zhang, Hua, 2000. "Shareholding structure and corporate performance of partially privatized firms: Evidence from listed Chinese companies," Pacific-Basin Finance Journal, Elsevier, vol. 8(5), pages 587-610, October.
    13. Josef C. Brada, 1996. "Privatization Is Transition--Or Is It?," Journal of Economic Perspectives, American Economic Association, vol. 10(2), pages 67-86, Spring.
    14. Che, Jiahua, 2002. "Rent Seeking and Government Ownership of Firms: An Application to China's Township-Village Enterprises," Journal of Comparative Economics, Elsevier, vol. 30(4), pages 787-811, December.
    15. Perotti, Enrico C, 1995. "Credible Privatization," American Economic Review, American Economic Association, vol. 85(4), pages 847-859, September.
    16. Jeffry M. Netter & William L. Megginson, 2001. "From State to Market: A Survey of Empirical Studies on Privatization," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 321-389, June.
    17. Yuanzheng Cao & Yingyi Qian & Barry R. Weingast, 1999. "From federalism, Chinese style to privatization, Chinese style," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 7(1), pages 103-131, March.
    18. repec:bla:jfinan:v:53:y:1998:i:3:p:1081-1110 is not listed on IDEAS
    19. Shumei Gao and Mark E. Schaffer & Shumei Gao and Mark E. Schaffer, 1998. "Financial Discipline in the Enterprise Sector in Transition Countries: How Does China Compare?," William Davidson Institute Working Papers Series 124, William Davidson Institute at the University of Michigan.
    20. Chen, G M & Lee, Bong-Soo & Rui, Oliver, 2001. "Foreign Ownership Restrictions and Market Segmentation in China's Stock Markets," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 24(1), pages 133-155, Spring.
    21. Michael H. Riordan & David E. M. Sappington, 1987. "Information, Incentives, and Organizational Mode," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 102(2), pages 243-263.
    22. Roman Frydman & Cheryl Gray & Marek Hessel & Andrzej Rapaczynski, 2000. "The Limits of Discipline: Ownership and Hard Budget Constraints in the Transition Economies," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 8(3), pages 577-601, November.
    23. Xiaonian Xu & Yan Wang, 1997. "Ownership structure, corporate governance, and corporate performance : the case of Chinese stock companies," Policy Research Working Paper Series 1794, The World Bank.
    24. Lihui Tian, 2001. "Government Shareholding and the Value of China's Modern Firms," William Davidson Institute Working Papers Series 395, William Davidson Institute at the University of Michigan.
    25. Bernardo Bortolotti & Marcella Fantini & Carlo Scarpa, 2000. "Why Do Governments Sell Privatised Companies Abroad?," William Davidson Institute Working Papers Series 293, William Davidson Institute at the University of Michigan.
    26. Mok, Henry M. K. & Hui, Y. V., 1998. "Underpricing and aftermarket performance of IPOs in Shanghai, China," Pacific-Basin Finance Journal, Elsevier, vol. 6(5), pages 453-474, November.
    27. Sanford J. Grossman & Oliver D. Hart, 1980. "Takeover Bids, the Free-Rider Problem, and the Theory of the Corporation," Bell Journal of Economics, The RAND Corporation, vol. 11(1), pages 42-64, Spring.
    28. Jones, Steven L. & Megginson, William L. & Nash, Robert C. & Netter, Jeffry M., 1999. "Share issue privatizations as financial means to political and economic ends," Journal of Financial Economics, Elsevier, vol. 53(2), pages 217-253, August.
    29. Frydman, R. & Gray, C. & Hessel, M. & Rapaczynski, A., 2000. "The Limits of Discipline: Ownership and Hard Budget Constraints in the Transition Economies," Working Papers 00-02, C.V. Starr Center for Applied Economics, New York University.
    30. Jenkinson, Tim & Ljungqvist, Alexander, 2001. "Going Public: The Theory and Evidence on How Companies Raise Equity Finance," OUP Catalogue, Oxford University Press, edition 2, number 9780198295990.
    31. Dewenter, Kathryn L & Malatesta, Paul H, 1997. "Public Offerings of State-Owned and Privately-Owned Enterprises: An International Comparison," Journal of Finance, American Finance Association, vol. 52(4), pages 1659-1679, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:lic:licosd:16205 is not listed on IDEAS

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:lic:licosd:16205 is not listed on IDEAS
    2. Jeffry M. Netter & William L. Megginson, 2001. "From State to Market: A Survey of Empirical Studies on Privatization," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 321-389, June.
    3. repec:dau:papers:123456789/3860 is not listed on IDEAS
    4. Hua Zhang & Yuanyang Song & Yuan Ding, 2015. "What Drives Managerial Perks? An Empirical Test of Competing Theoretical Perspectives," Journal of Business Ethics, Springer, vol. 132(2), pages 259-275, December.
    5. Megginson, William L., 2005. "The economics of bank privatization," Journal of Banking & Finance, Elsevier, vol. 29(8-9), pages 1931-1980, August.
    6. Henk Berkman & Rebel A. Cole & Lawrence J. Fu, 2014. "Improving corporate governance where the State is the controlling block holder: evidence from China," The European Journal of Finance, Taylor & Francis Journals, vol. 20(7-9), pages 752-777, September.
    7. Wang, Changyun, 2005. "Ownership and operating performance of Chinese IPOs," Journal of Banking & Finance, Elsevier, vol. 29(7), pages 1835-1856, July.
    8. Huyghebaert, Nancy & Quan, Qi, 2009. "Share issuing privatizations in China: Sequencing and its effects on public share allocation and underpricing," Journal of Comparative Economics, Elsevier, vol. 37(2), pages 306-320, June.
    9. Chen, Gongmeng & Firth, Michael & Rui, Oliver, 2006. "Have China's enterprise reforms led to improved efficiency and profitability?," Emerging Markets Review, Elsevier, vol. 7(1), pages 82-109, March.
    10. Cabeza-García, Laura & Gómez-Ansón, Silvia, 2011. "Post-privatisation ownership concentration: Determinants and influence on firm efficiency," Journal of Comparative Economics, Elsevier, vol. 39(3), pages 412-430, September.
    11. Seung‐Doo Choi & Inmoo Lee & William Megginson, 2010. "Do Privatization IPOs Outperform in the Long Run?," Financial Management, Financial Management Association International, vol. 39(1), pages 153-185, March.
    12. Sun, Qian & Tong, Wilson H. S., 2003. "China share issue privatization: the extent of its success," Journal of Financial Economics, Elsevier, vol. 70(2), pages 183-222, November.
    13. Boubakri, Narjess & Guedhami, Omrane & Kwok, Chuck C.Y. & Wang, He (Helen), 2019. "Is privatization a socially responsible reform?," Journal of Corporate Finance, Elsevier, vol. 56(C), pages 129-151.
    14. Trien Le & Amon Chizema, 2011. "State ownership and firm performance: Evidence from the Chinese listed firms," Organizations and Markets in Emerging Economies, Faculty of Economics, Vilnius University, vol. 2(2).
    15. Fan, Joseph P.H. & Wong, T.J. & Zhang, Tianyu, 2007. "Politically connected CEOs, corporate governance, and Post-IPO performance of China's newly partially privatized firms," Journal of Financial Economics, Elsevier, vol. 84(2), pages 330-357, May.
    16. Feng, Fang & Sun, Qian & Tong, Wilson H. S., 2004. "Do government-linked companies underperform?," Journal of Banking & Finance, Elsevier, vol. 28(10), pages 2461-2492, October.
    17. Oussama Nheri, 2014. "Economic reforms, corporate governance and privatization method as determinants in performance changes of new privatized firms: the case of MENA countries," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 18(1), pages 95-127, February.
    18. Kato, Takao & Long, Cheryl, 2006. "Executive Compensation, Firm Performance, and Corporate Governance in China: Evidence from Firms Listed in the Shanghai and Shenzhen Stock Exchanges," Economic Development and Cultural Change, University of Chicago Press, vol. 54(4), pages 945-983, July.
    19. Huang, Guihai & Song, Frank M., 2005. "The financial and operating performance of China's newly listed H-firms," Pacific-Basin Finance Journal, Elsevier, vol. 13(1), pages 53-80, January.
    20. Tian, Lihui, 2011. "Regulatory underpricing: Determinants of Chinese extreme IPO returns," Journal of Empirical Finance, Elsevier, vol. 18(1), pages 78-90, January.
    21. Bernardo Bortolotti & Mara Faccio, 2004. "Reluctant Privatization," Working Papers 2004.130, Fondazione Eni Enrico Mattei.
    22. Hyacinthe Y. Somé & Marcelo Cano‐Kollmann & Ram Mudambi & Jean‐Claude Cosset, 2021. "The effect of privatization on the characteristics of innovation," Financial Management, Financial Management Association International, vol. 50(3), pages 875-898, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ete:revbec:20040405. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: library EBIB (email available below). General contact details of provider: https://edirc.repec.org/data/fekulbe.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.