Effects of Deregulation and Vertical Unbundling on the Performance of China's Electricity Generation Sector

36 Pages Posted: 1 Dec 2011

See all articles by Hang Gao

Hang Gao

affiliation not provided to SSRN

Johannes Van Biesebroeck

K.U.Leuven; Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 2 versions of this paper

Date Written: November 1, 2011

Abstract

We study whether the 2002 deregulation and vertical unbundling of the Chinese electricity sector has boosted productivity in the generation segment of the industry. Controlling explicitly for sources of price-heterogeneity across firms and for firm-fixed effects, we find deregulation to be associated with a reduction in labor input and material use of 6 and 4 percent, respectively. This effect only appears two years after the reforms, is robust to alternative ways of identifying restructured firms, and to the nonrandom selection of restructured firms using a matching estimator. Input use of new state-owned firms that start operations two years into the reform period does not differ significantly anymore from input use of private sector entrants.

Keywords: productivity, regulation

JEL Classification: L5, L9, O4

Suggested Citation

Gao, Hang and Van Biesebroeck, Johannes, Effects of Deregulation and Vertical Unbundling on the Performance of China's Electricity Generation Sector (November 1, 2011). Available at SSRN: https://ssrn.com/abstract=1966941 or http://dx.doi.org/10.2139/ssrn.1966941

Hang Gao (Contact Author)

affiliation not provided to SSRN

Johannes Van Biesebroeck

K.U.Leuven ( email )

Naamsestraat 69
B-3000 Leuven
Belgium
+3216326793 (Phone)
+3216326796 (Fax)

HOME PAGE: http://www.econ.kuleuven.be/public/N07057/

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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