Abstract
This study examines the effects of state ownership on the productivity distribution of different quantiles of China’s agri-food firms based on data from the Chinese Industrial Enterprises Database between 1998 and 2013. Using panel quantile regression, this study finds that the contribution of state ownership to productivity varies across different quantiles of the productivity distribution. State ownership inhibits total factor productivity (TFP) of firms with low-level productivity but has no effect on TFP for firms with medium- and high-level productivity. Regions play a moderating role on the state ownership-productivity link. Regional economic development alleviates the inhibition of state-owned capital on the TFP of firms with low- and high-level productivity.
Highlights
The effect of ownership structures on firms’ total factor productivity (TFP) has been debated for decades
The inhibiting effect of state-owned capital share on TFP of firms with high-level productivity is offset when considering the effect of regional economic development
In the case of low-level TFP firms, the effect of regional economic development dilutes the inhibitory effect of the state-owned capital share, the effect of regional economic development is not sufficient to completely offset the inhibitory effect of state-owned capital share
Summary
The effect of ownership structures on firms’ total factor productivity (TFP) has been debated for decades. Most studies of firm productivity or profitability indicate that private ownership is more efficient than state ownership (Bai et al, 2000; Barbetta et al, 2007; Boardman & Vining, 1989; Ehrlich et al, 1994; Le et al, 2021). Most of the previous literature study the effect of ownership structures on TFP through ordinary least squares (OLS) regressions or fixed effects (FE) models in which the dependent variables are represented in the form of average values, ignoring the possible quantile heterogeneity of dependent variables in the causal relationship. This study uses the panel quantile regression proposed by Koenker (2004) to examine the effect of state-owned capital on the TFP distribution of agri-food firms in China. Considering the huge regional differences in the level of economic development in China, we examine the role regions play in the state ownership-productivity link
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