The relationship between ownership structure and investment efficiency in China-focusing on SOEs and foreign owned enterprises.

摘要

China owes much of its great economic achievement to its investment-and-export led growth model. This study analyzes the impact of ownership structure on firms' investment efficiency. Using a firm-level dataset drawn from the World Bank's Enterprises Survey, the study finds that ownership structure contributes to firms' investment efficiency. State owned enterprises, in general, are less profitable than their domestic private and foreign owned competitors. Foreign owned enterprises face critical challenges due to economic distortions. The study also finds that, despite significant differences across ownership classifications, firm sector, size, management experience, employees training program and business obstacles also have an impact on firms' investment efficiency. Results of this analysis have important policy implications for the ongoing economic reforms in China.