Do Institutions Not Matter in China? Evidence from Manufacturing Enterprises
38 Pages Posted: 6 May 2008 Last revised: 12 Mar 2010
Date Written: February 20, 2010
Abstract
This study addresses the apparent puzzle that China achieved spectacular economic performance despite weak institutions. Using a World Bank survey of 1,566 manufacturing enterprises in 18 Chinese cities, we investigated whether property rights protection mattered for enterprise performance. We found that property rights protection had a positive and statistically significant impact on enterprise productivity. Two-step GMM estimation and the difference-in-differences estimation further established the causal impacts of property rights protection on enterprise productivity. These findings were robust to various controls, outliers, and alternative measures of productivity and property rights protection.
Keywords: institutions, law, property rights, China, growth
JEL Classification: D23, K12, L60, O12, O53
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Property Rights and Financial Development: The Legacy of Japanese Colonial Institutions
By Dongwoo Yoo and Richard H. Steckel
-
Do Institutions Matter? Estimating the Effect of Institutions on Economic Performance in China
By Ying Fang
-
Civic Education and Democratic Backsliding in the Wake of Kenya's Post-2007 Election Violence
By Steven E. Finkel and Jeremy Horowitz