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Do China's State-Owned Enterprises Maximize Profit?

Author

Listed:
  • Chongwoo Choe

    (Department of Economics and Finance, La Trobe University)

  • Xiangkang Yin

    (Department of Economics and Finance, La Trobe University)

Abstract
The usual belief is that the China's state enterprise reform with contract management responsibility system has led state-owned enterprises to maximize profit. Nonetheless the poor performance of state-owned enterprises after the reform relative to other forms of enterprises remains a puzzle. As the existing explanations for this puzzle based on increased competition or soft budget constraint are not entirely satisfactory, the authors propose an alternative explanation based on the incentive aspect of the reform.

Suggested Citation

  • Chongwoo Choe & Xiangkang Yin, 1998. "Do China's State-Owned Enterprises Maximize Profit?," Working Papers 1998.07, School of Economics, La Trobe University.
    • Handle: RePEc:ltr:wpaper:1998.07
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    References listed on IDEAS

    as
    1. Woo Wing Thye & Hai Wen & Jin Yibiao & Fan Gang, 1994. "How Successful Has Chinese Enterprise Reform Been? Pitfalls in Opposite Biases and Focus," Journal of Comparative Economics, Elsevier, vol. 18(3), pages 410-437, June.
    2. Schaffer, Mark E., 1998. "Do Firms in Transition Economies Have Soft Budget Constraints? A Reconsideration of Concepts and Evidence," Journal of Comparative Economics, Elsevier, vol. 26(1), pages 80-103, March.
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    Cited by:

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    2. Yin, Xiangkang, 2001. "A dynamic analysis of overstaff in China's state-owned enterprises," Journal of Development Economics, Elsevier, vol. 66(1), pages 87-99, October.

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