2017
DOI: 10.1162/rest_a_00637
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Recasting the Iron Rice Bowl: The Reform of China's State-Owned Enterprises

Abstract: Following the enactment of reforms in the mid-1990s, China's state-owned enterprises (SOEs) became more profitable. Using theoretical insights from Azmat, Manning, and Van Reenen (2012) and Karabarbounis and Neiman (2014) and econometric methods in De Loecker and Warzynski (2012), this paper finds that SOE restructuring was nevertheless limited. This is because SOE profitability gains in part reflect that they were under less political pressure to hire excess labor and also their cost of capital fell and their… Show more

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Cited by 136 publications
(83 citation statements)
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“…Firms with different ownership significantly differed in their economic behaviour (Lu, ; Qin, ). For instance, state‐owned enterprises (SOEs) were larger than their private counterparts and were more closely connected with the government (Berkowitz, Ma, & Shuichiro, ; Li & Xu, ). In contrast, foreign‐owned and private firms were less affected by the government, and they could more flexibly adjust their economic behaviour to maximise profits.…”
Section: Resultsmentioning
confidence: 99%
“…Firms with different ownership significantly differed in their economic behaviour (Lu, ; Qin, ). For instance, state‐owned enterprises (SOEs) were larger than their private counterparts and were more closely connected with the government (Berkowitz, Ma, & Shuichiro, ; Li & Xu, ). In contrast, foreign‐owned and private firms were less affected by the government, and they could more flexibly adjust their economic behaviour to maximise profits.…”
Section: Resultsmentioning
confidence: 99%
“…On the other hand, state-owned enterprises feature life-long work security, seniority-based salary, and extensive in-company welfare (Berkowitz, Ma, & Nishioka, 2017). China's "iron rice bowl" employment systems lead employees to perceive the enterprises as their own homes, and to have a sense of belonging to their organisation (Berkowitz et al, 2017), closely related to perceived insider status.…”
Section: Theoretical Implicationsmentioning
confidence: 99%
“…3 The slogan adopted by the Communist Party to describe the proposed reforms was "Grasp the Large, Let Go of the Small." "Let Go of the Small" refers to the fact that small state-owned …rms were to be closed or sold.…”
Section: Institutional Backgroundmentioning
confidence: 99%