Abstract
In this paper we attempt to investigate empirically the cause of inefficiency of Chinese state-owned enterprises in 1989–95, in the contract relation between Chinese government and state-owned enterprises. It is found that several moral hazards arose, in 1989–95 Chinese state-owned enterprises, in textile industry. To put it another way, the enterprises chose less private effort and risk than the first-best levels, because of the incentive structure designed by the government. Especially, concave payoff function to the enterprises designed by the government made them institutional risk averters and choose too little risks.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Goldfeld, S. and Quandt, R. E.: Budget Constraints, Bailout, and the Firm under Central Planning. Journal of Comparative Economics 12, 502–520 (1988)
Goldfeld, S. and Quandt, R. E.: Effect of Bailouts, Taxes and Risk Aversion on the Enterprise. Journal of Comparative Economics 16, 150–167 (1992)
Hansen, L. P.: Large Sample Properties of Generalized Method of Moments Estimators. Econometirca 50, 1029–1054 (1982)
Hsiao, C., Nugent, J., Perrigne, I. and Qiu, J.: Share versus Residual Contracts: The Case of Chinese TVEs. Journal of Comparative Economics 26, 317–337 (1998)
Prell,M.A.: The Two Kornai Effects. Journal of Comparative Economics 22, 267–276 (1996).
Qian, Y.: A Theory of Shortage in Socialist Economies Based on the `Soft Budget Constraint’. American Economic Review 84, 145–156 (1994)
Zou, L. and Sun, L.: Interest Rate Policy and Incentive of State-Owned Enterprises in the Transitional China. Journal of Comparative Economics 23
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2002 Springer Japan
About this paper
Cite this paper
Yano, G., Shiraishi, M. (2002). State-Owned Enterprises and Their Contract with Government in China: An Econometric Analysis. In: Jin, Q., Li, J., Zhang, N., Cheng, J., Yu, C., Noguchi, S. (eds) Enabling Society with Information Technology. Springer, Tokyo. https://doi.org/10.1007/978-4-431-66979-1_21
Download citation
DOI: https://doi.org/10.1007/978-4-431-66979-1_21
Publisher Name: Springer, Tokyo
Print ISBN: 978-4-431-66981-4
Online ISBN: 978-4-431-66979-1
eBook Packages: Springer Book Archive