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Ownership, productivity and firm survival in China

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Abstract

By tracking more than 3000 manufacturing firms established in 1999 in China over a span of 10 years, we examined whether the status of firm survival differs in China from the so-called stylized fact that has been established in studies for other countries. We also analyzed the unique effects of ownership and productivity on firm survival in a transitional economy. The empirical evidence suggests that although the state-owned firms are still under the protection from the Chinese government, productivity influences firm survival, the effects of government protection and market selection shift over time and in various growth rate sectors, and productivity exerts a different influence on exit This paper again confirms again that some evidence independent of various institutions and policies establishes the “natural law” of industrial dynamics, and “good” economy transition can make room for market selection.

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Notes

  1. We selected 100 firms at first, and succeed in tracking 41 firms with this method.

  2. In China, under the following conditions a firm may be withdrawn or revoked its business license: false registration, operation beyond the registered scope of business, not open or closed with no reason, and failure to pass the annual inspection.

  3. Through checking the information from firms’ annual reports, websites and other materials, we find firms cancelling their business licenses may occur through the following situations: bankruptcy, long or short period net loss, merger or acquisition.

  4. Joint venture includes not only funds from a foreign country but also from Hong Kong, Taiwan, and Macao.

  5. Resource: http://finance.stockstar.com/finance/macrodata/ppilist.aspx (1999–2009).

  6. Resource: http://data.eastmoney.com/cjsj/pmi.html (2005–2009).

  7. Resource: http://www.stats.gov.cn/tjsj/ndsj/2013/indexch.htm (1999–2009).

  8. Resource: http://data.stats.gov.cn/ (1999–2009).

  9. In this regression, we didn’t employ the sample data from the year of 1999–2009 (showed in previous study), but of 2000–2008, as we set 1999 as observation start point and 2009 as end point. At the same time, we eliminated part of the sample due to some index value outlier(s?) or missing(Missing what?), and the same situation occurs in next studies.

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Acknowledgments

The National Science Council in China funded the study under the project No. 71203023.

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Authors and Affiliations

  1. SPEA, Indiana University, Bloomington, IN, USA

    David Audretsch, Adrian Hepfer & Hugo Menendez

  2. CIBO, Dongbei University of Finance and Economics, Dalian, China

    Xiaodan Guo & Xingzhi Xiao

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  1. David Audretsch
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  2. Xiaodan Guo
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  3. Adrian Hepfer
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  4. Hugo Menendez
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  5. Xingzhi Xiao
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Correspondence to David Audretsch.

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Audretsch, D., Guo, X., Hepfer, A. et al. Ownership, productivity and firm survival in China. Econ Polit Ind 43, 67–83 (2016). https://doi.org/10.1007/s40812-015-0021-6

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