Correlation between Sales and Profit Development and Ownership Type in the Chinese Chemical Industry

摘要

This paper examines the correlation between ownership type of chemical companies in China and the development of their sales and profit in the period from 2006 to 2012. Data from China's statistical yearbook for the industry segment "Manufacture of Raw Chemical Materials and Chemical Products" was used, which covers all larger companies with annual sales above about 20 million RMB of sales (more than 20,000 companies in the segment). The results show a strong correlation between ownership type and growth in profit and sales. Private domestic companies perform best, achieving sales and profit growth rates that are substantially above the industry average. In contrast, the performance of foreign-owned chemical companies is slightly below industry average while the results of state-owned chemical enterprises are substantially below industry average. Possible reasons for the difference in performance are given, and consequences for the different ownership types are discussed.