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Government assistance and total factor productivity : firm-level evidence from China, 1998-2007.

Li, S. and Harris, R. (2016) 'Government assistance and total factor productivity : firm-level evidence from China, 1998-2007.', Working Paper. Durham University Business School, Durham.

Abstract

The provision of large-scale assistance to industry is very important in China. The major contribution of this paper is to use Chinese firm-level panel data for 1998-2007 to introduce measures of assistance received by each firm directly into industry-level production functions determining firm output. Our results indicate inverted U-shaped gains from assistance: across the 26 industries considered, firms receiving assistance rates of 1-10%, 10-19%, 20-49% and 50+% experienced on average 4.5%, 9.4%, 9.2% and -3% gains in TFP, respectively. We also provide a simple agency model that justifies such a result.

Item Type:Monograph (Working Paper)
Additional Information:CEGAP Working Papers, No 2016_04
Full text:(VoR) Version of Record
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Status:Peer-reviewed
Publisher Web site:http://EconPapers.repec.org/RePEc:dur:cegapw:2016_04
Date accepted:No date available
Date deposited:21 September 2016
Date of first online publication:September 2016
Date first made open access:No date available

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