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The Effects of Privatization on Firm Productivity in China

Zhangkai Huang et al.

The Journal of Law and Economics2025https://doi.org/10.1086/735434article
AJG 3ABDC A*
Weight
0.37

Abstract

We study the productivity effects of the world’s largest privatization program in China. Relying on a matching and difference-in-differences procedure, we find that privatizations robustly led to large productivity gains. Privatizations improved total factor productivity (TFP) by 13–15 percent, and this estimate is at the high end of the estimates obtained from other transitional countries. Further evidence suggests that productivity gains came from improvements in management quality. The positive effect of privatization on TFP was more pronounced among firms in more competitive industries, which suggests complementarity between competition and privatizations. Privatizations worked less well for large state-owned entities under the oversight of the central government. Our evidence suggests that the privatization program was a key contributor to China’s growth in previous decades.

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https://doi.org/https://doi.org/10.1086/735434

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@article{zhangkai2025,
  title        = {{The Effects of Privatization on Firm Productivity in China}},
  author       = {Zhangkai Huang et al.},
  journal      = {The Journal of Law and Economics},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1086/735434},
}

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Evidence weight

0.37

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.16 × 0.4 = 0.06
M · momentum0.53 × 0.15 = 0.08
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.