Limit to Autocracy: An Analysis of China's Renationalization

41 Pages Posted: 6 Jan 2018

See all articles by Zhangkai Huang

Zhangkai Huang

Tsinghua University - School of Economics & Management

Lixing Li

Peking University - China Center for Economic Research (CCER)

Guangrong Ma

Peking University; Renmin University of China - School of Finance

Jun Qian

Fanhai International School of Finance, Fudan University; University of Pennsylvania - Wharton Financial Institutions Center

Date Written: December 24, 2017

Abstract

We document large-scale reversal of privatization in China — local governments taking back shares in a quarter of previously privatized firms. Politicians who are not affiliated with any of the dominant political factions are more likely to waver under pressure and adopt renationalization because they are disadvantaged in the promotion process and are more sensitive to unemployment pressure. The failure to adhere to the privatization scheme reduces productivity and raises labor redundancy and firm leverage. The policy reversal casts doubt on the notion that autocracies have advantages in policy implementation.

Keywords: Renationalization, Privatization, Political Faction, Unemployment, Productivity

JEL Classification: G32, H11, P31, L22

Suggested Citation

Huang, Zhangkai and Li, Lixing and Ma, Guangrong and Qian, Jun, Limit to Autocracy: An Analysis of China's Renationalization (December 24, 2017). Available at SSRN: https://ssrn.com/abstract=3096452 or http://dx.doi.org/10.2139/ssrn.3096452

Zhangkai Huang (Contact Author)

Tsinghua University - School of Economics & Management ( email )

Beijing, 100084
China

Lixing Li

Peking University - China Center for Economic Research (CCER) ( email )

Beijing, 100871
China

Guangrong Ma

Peking University ( email )

No. 38 Xueyuan Road
Haidian District
Beijing, Beijing 100871
China

Renmin University of China - School of Finance

Ming De Main Building
Renmin University of China
Beijing, Beijing 100872
China

Jun Qian

Fanhai International School of Finance, Fudan University ( email )

Shanghai
China
86-21-63895501 (Phone)
86-21-62934572 (Fax)

HOME PAGE: http://www.fisf.fudan.edu.cn/show-65-69.html

University of Pennsylvania - Wharton Financial Institutions Center

2306 Steinberg Hall-Dietrich Hall
Philadelphia, PA 19104
United States

HOME PAGE: http://fic.wharton.upenn.edu/fic/

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