Political Connections, State Ownership and Productivity in China

Arbeitspapier

Subordination of business to political influence has remains pervasive in China. We construct a Schumpeterian-type model of growth with managerial time allocation between productive activities and building up political connections. The model predicts the impact of different patterns of state ownership and/or political connectedness on firm productivity linked to a period of liberalization. We then investigate the relationship between political connections, state ownership, and total factor productivity (TFP) using firm-level data for China between 1998 and 2007. We find, consistent with the model, that the firms with the highest levels of TFP had low levels of political affiliation and/or state ownership.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 6236

Classification and Topics

• Classification: Wirtschaft ; Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity ; Industrialization; Manufacturing and Service Industries; Choice of Technology ; Institutions and Growth
• Subject: TFP ; political connections ; state ownership ; China

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Harris, Richard ; Hashimzade, Nigar ; Ding, Sai
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/149323
• Last update: 10.03.2025, 11:45 AM CET