Are State-Owned Enterprises the Curse of Economic Growth?
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| Title | Are State-Owned Enterprises the Curse of Economic Growth?
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| Author | Qi Hao and Zhang Chen |
| Organization | School of Economics, Renmin University of China |
| Email | tsihow@gmail.com；zhangchen2011@ruc.edu.cn |
| Key Words | State-owned Enterprises; Economic Growth; Allocation Efficiency; Productive Efficiency; Overtime Work |
| Abstract | What effect do China’s state-owned enterprises have on economic growth? This paper analyzes this question with the growth model from the School of Social Structure of Accumulation. From the perspective of Social Structure of Accumulation and based on the differences of state-owned and private enterprises in working hours and the speed of technological progress, this paper proposes the following hypothesis: the allocation efficiency of private enterprises relies on overtime work which is not sustainable in the long run so that the tradeoff between the two kinds of efficiency can only happen in the short run while in the long run, state-owned enterprises promotes economic growth through the growth of productive efficiency. Based on the growth model of the Social Structure of Accumulation, this paper finds that raising the state-owned share in the economy has no negative effect on economic growth, and has a significant positive effect in the long run. In addition, this paper replicates empirical studies whose conclusions contradict with ours and finds these studies unconvincing due to econometric deficiencies. In sum, state-owned enterprises are favorable to economic growth. |
| Serial Number | WP861 |
| Time | 2015-04-07 |
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