FANG Mingyue:Innate Advantages or Hard Work?——An Empirical Study of the Impacts of SOEs'Administrative Level on Total Factor Productivity

Abstract：This paper studies effects and mechanisms of SOEs' administrative level on firms' total factor productivity (TFP) for the first time, by using panel data of Chinese manufacturing SOEs during 1999-2007.We find that the administrative level of SOEs is positively related with TFP.Compared to local state-owned enterprises, central SOEs have both innate advantages and hard work in efficiency.On one hand, central SOEs get access to low interest bank loans which are helpful to improve TFP by high administrative level.On the other hand, central SOEs raise TFP by reducing administrative expenses.As for local SOEs, provincial SOEs only have innate advantages, but have no hard work.Provincial SOEs increase TFP only through low raw material costs.Furthermore, for both central SOEs and provincial SOEs, R&D investments do not increase TFP, which implies R&D only brings about subsidy effect rather than innovation effect.Our findings have significant policy implications for efficiency improvement of SOEs and optimization of the layout of SOEs.

Key words： SOEs   Administrative Level   Total Factor Productivity   Loan   Tax Subsidy

source:Finance & Trade Economics ,No.11,2014