Government Assistance and Total Factor Productivity: Firm-level Evidence from China, 1998-2007
Li, S.; Harris, R.
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.
Li, S., & Harris, R. (2016). Government Assistance and Total Factor Productivity: Firm-level Evidence from China, 1998-2007
|Publication Date||Sep 1, 2016|
|Deposit Date||Sep 12, 2016|
|Publicly Available Date||Sep 21, 2016|
|Series Title||CEGAP working papers|
Published Working Paper
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