Get 20M+ Full-Text Papers For Less Than $1.50/day. Subscribe now for You or Your Team.

Learn More →

China's State-Owned Enterprises in the First Reform Decade: An Analysis of a Declining Monopsony

China's State-Owned Enterprises in the First Reform Decade: An Analysis of a Declining Monopsony We study the evolution of employment and wage outcomes in Chinese SOEs during the first decade of economic reforms, using a panel of data for almost 1000 enterprises covering the years 1980–90. Unlike the 1990s, which were marked by growing labor redundancy in the SOE sector, we find that CPE-fostered capital-intensity remained so extreme during the 1980s that workers' marginal products exceeded their full wages, just as in a classical monopsony outcome. Consistent with reasoning about the impact of competition upon monopsony, however, we find the marginal product-wage gap declined in the face of market-oriented reforms, and that monopsony was weakest where the state sector's shares of industrial output and enterprises were lowest, and for smaller enterprises and enterprises managed by lower levels of government. Our analysis also supports Xu and Zhuang's (1996) finding that bonus payments increased enterprises' revenues by more than it did their costs. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Economic Change and Restructuring Springer Journals

China's State-Owned Enterprises in the First Reform Decade: An Analysis of a Declining Monopsony

Loading next page...
 
/lp/springer-journals/china-s-state-owned-enterprises-in-the-first-reform-decade-an-analysis-YdQkA9ldZA

References (30)

Publisher
Springer Journals
Copyright
Copyright © 2002 by Kluwer Academic Publishers
Subject
Economics; Development Economics; International Economics; Economic Systems; Macroeconomics/Monetary Economics//Financial Economics; Economic Growth; Economic Policy
ISSN
1573-9414
eISSN
1573-0808
DOI
10.1023/A:1020137529522
Publisher site
See Article on Publisher Site

Abstract

We study the evolution of employment and wage outcomes in Chinese SOEs during the first decade of economic reforms, using a panel of data for almost 1000 enterprises covering the years 1980–90. Unlike the 1990s, which were marked by growing labor redundancy in the SOE sector, we find that CPE-fostered capital-intensity remained so extreme during the 1980s that workers' marginal products exceeded their full wages, just as in a classical monopsony outcome. Consistent with reasoning about the impact of competition upon monopsony, however, we find the marginal product-wage gap declined in the face of market-oriented reforms, and that monopsony was weakest where the state sector's shares of industrial output and enterprises were lowest, and for smaller enterprises and enterprises managed by lower levels of government. Our analysis also supports Xu and Zhuang's (1996) finding that bonus payments increased enterprises' revenues by more than it did their costs.

Journal

Economic Change and RestructuringSpringer Journals

Published: Oct 10, 2004

There are no references for this article.