Abstract: Efficient firms may contribute more to aggregate industrial growth than inefficient. This paper takes the growth of China’s state-owned, private and foreign firms’ value added as a case. Data were monthly changes for 2006-2017. The study tested for differentials of the contribution of three types of firms to aggregate industrial growth. Variables contained a unit root but not cointegrated. A first-differenced VAR(4) was estimated. Significant findings are that the value added in private, foreign and state-owned firms increased by 1%, total industrial value added grew by 1.06%, 0.70% and 0.39%, respectively. Although private firms held the smallest asset size, private enterprises contributed most to industrial growth in China. State-owned firms held the largest asset size but contributed the least to industrial growth. State-owned firms have the highest share of lost firms and the smallest profits compared with private and foreign firms. This study supplies new evidence for the greater efficiency of private firms (including foreign firms) than that of state-owned firms.
Keywords: Industry, growth, state, private, foreign, firm.
Title: Contributions of Growth in State-owned and Private-owned Firms to the Economy in China
Author: Gaolu Zou, Jiang Ling, Wang Jingru, Xiao Wuhe
International Journal of Interdisciplinary Research and Innovations
ISSN 2348-1218 (print), ISSN 2348-1226 (online)
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