What Drives the Volatility of Firm Level Productivity in China?
The enterprise reforms of the 1990s profoundly changed the structure of the economy in China. With the deepening of market economy, the share of the state-owned and collective enterprises declined. Expansion and contraction, as well as establishmen...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2014/04/19447081/drives-volatility-firm-level-productivity-china-drives-volatility-firm-level-productivity-china http://hdl.handle.net/10986/18327 |
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okr-10986-183272021-04-23T14:03:44Z What Drives the Volatility of Firm Level Productivity in China? Luo, Xubei Zhu, Nong ACCOUNTING AVERAGE GROWTH RATE AVERAGE PRODUCTIVITY BAND-PASS FILTER BUSINESS CYCLES BUSINESS ENVIRONMENT BUSINESS REGULATION CAPITAL RATIO CENTRAL PLANNING CHANGE IN VOLATILITY COMPARATIVE ADVANTAGE CORPORATIONS DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DRIVERS ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMIC PROGRESS ECONOMIC REFORMS ECONOMIC TIME SERIES EMPLOYMENT OPPORTUNITIES ENTERPRISE REFORM ENTERPRISE REFORMS EXPANSION EXPORTS EXTERNAL FINANCE FINANCIAL CRISIS FINANCIAL SUPPORT FIRM SIZE FOREIGN CAPITAL FOREIGN DIRECT INVESTMENT FOREIGN ENTERPRISES FOREIGN FIRMS GDP PER CAPITA GROWTH PERFORMANCE GROWTH RATE GROWTH RATE OF SALES GROWTH RATES HIGHER VOLATILITY INCOME INDIVIDUAL FIRM INDIVIDUAL FIRMS INDUSTRIAL ECONOMY INNOVATION INSURANCE INTANGIBLE INTANGIBLE ASSETS INTERNATIONAL BUSINESS JOINT OWNERSHIP LABOR FORCE LABOR MARKET LABOR MARKET FLEXIBILITY LABOR MARKETS LONG-TERM INVESTMENT MACROECONOMIC VOLATILITY MARKET ECONOMY MARKET INFORMATION MERGERS MOTIVATION NATIONAL INCOME NEW PRODUCT OPEN UNEMPLOYMENT OUTPUT OUTPUT GAP OUTPUT PER CAPITA OUTPUT VOLATILITY OVERALL VOLATILITY PENSION PENSION REFORMS PENSIONS PLANNED ECONOMIES PRIVATE CAPITAL PRIVATE ENTERPRISES PRIVATE INVESTMENT PRIVATE SECTOR PRIVATIZATION PRODUCTIVITY PRODUCTIVITY GROWTH PRODUCTIVITY INCREASES RAPID DEVELOPMENT REAL GDP RESERVE BANK RETIREMENT REVIEW OF ECONOMICS SIZE OF FIRMS SMALL FIRMS SOCIAL PROTECTION STANDARD DEVIATION TOTAL OUTPUT TURNOVERS UNEMPLOYED UNEMPLOYMENT URBAN WORKERS VOLATILITY WAGE DIFFERENTIALS WAGE DISCRIMINATION WORLD TRADE WORLD TRADE ORGANIZATION The enterprise reforms of the 1990s profoundly changed the structure of the economy in China. With the deepening of market economy, the share of the state-owned and collective enterprises declined. Expansion and contraction, as well as establishment and closure, of firms became a common phenomenon. The level and volatility of firm productivity have become increasingly important aspects of the micro performance of the economy. This paper uses a firm-level data set collected annually by the National Bureau of Statistics of China in 1998-2007 to examine the role of different firm characteristics in productivity volatility. The paper measures productivity volatility at the firm level as the standard deviation of the annual growth rate of productivity. The main objectives are twofold: first, it examines the variation of productivity volatility across firms of different characteristics and their evolution over time; second, it investigates the sources of productivity volatility at the firm level in China. The results suggest that in general, productivity volatility at the firm level has declined over time in China. Among firms with different characteristics, large firms, old firms, foreign firms, and firms located in the coastal provinces are less volatile. Firm size and location are the two major factors that drive changes in productivity volatility, one in a positive way and one in a negative way. Although the gaps of volatility between smaller firms and larger firms declined, the gaps between firms located in the coastal provinces and inland provinces increased. 2014-05-14T21:15:16Z 2014-05-14T21:15:16Z 2014-04 http://documents.worldbank.org/curated/en/2014/04/19447081/drives-volatility-firm-level-productivity-china-drives-volatility-firm-level-productivity-china http://hdl.handle.net/10986/18327 English en_US Policy Research Working Paper;No. 6846 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research East Asia and Pacific China |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCOUNTING AVERAGE GROWTH RATE AVERAGE PRODUCTIVITY BAND-PASS FILTER BUSINESS CYCLES BUSINESS ENVIRONMENT BUSINESS REGULATION CAPITAL RATIO CENTRAL PLANNING CHANGE IN VOLATILITY COMPARATIVE ADVANTAGE CORPORATIONS DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DRIVERS ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMIC PROGRESS ECONOMIC REFORMS ECONOMIC TIME SERIES EMPLOYMENT OPPORTUNITIES ENTERPRISE REFORM ENTERPRISE REFORMS EXPANSION EXPORTS EXTERNAL FINANCE FINANCIAL CRISIS FINANCIAL SUPPORT FIRM SIZE FOREIGN CAPITAL FOREIGN DIRECT INVESTMENT FOREIGN ENTERPRISES FOREIGN FIRMS GDP PER CAPITA GROWTH PERFORMANCE GROWTH RATE GROWTH RATE OF SALES GROWTH RATES HIGHER VOLATILITY INCOME INDIVIDUAL FIRM INDIVIDUAL FIRMS INDUSTRIAL ECONOMY INNOVATION INSURANCE INTANGIBLE INTANGIBLE ASSETS INTERNATIONAL BUSINESS JOINT OWNERSHIP LABOR FORCE LABOR MARKET LABOR MARKET FLEXIBILITY LABOR MARKETS LONG-TERM INVESTMENT MACROECONOMIC VOLATILITY MARKET ECONOMY MARKET INFORMATION MERGERS MOTIVATION NATIONAL INCOME NEW PRODUCT OPEN UNEMPLOYMENT OUTPUT OUTPUT GAP OUTPUT PER CAPITA OUTPUT VOLATILITY OVERALL VOLATILITY PENSION PENSION REFORMS PENSIONS PLANNED ECONOMIES PRIVATE CAPITAL PRIVATE ENTERPRISES PRIVATE INVESTMENT PRIVATE SECTOR PRIVATIZATION PRODUCTIVITY PRODUCTIVITY GROWTH PRODUCTIVITY INCREASES RAPID DEVELOPMENT REAL GDP RESERVE BANK RETIREMENT REVIEW OF ECONOMICS SIZE OF FIRMS SMALL FIRMS SOCIAL PROTECTION STANDARD DEVIATION TOTAL OUTPUT TURNOVERS UNEMPLOYED UNEMPLOYMENT URBAN WORKERS VOLATILITY WAGE DIFFERENTIALS WAGE DISCRIMINATION WORLD TRADE WORLD TRADE ORGANIZATION |
| spellingShingle |
ACCOUNTING AVERAGE GROWTH RATE AVERAGE PRODUCTIVITY BAND-PASS FILTER BUSINESS CYCLES BUSINESS ENVIRONMENT BUSINESS REGULATION CAPITAL RATIO CENTRAL PLANNING CHANGE IN VOLATILITY COMPARATIVE ADVANTAGE CORPORATIONS DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DRIVERS ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMIC PROGRESS ECONOMIC REFORMS ECONOMIC TIME SERIES EMPLOYMENT OPPORTUNITIES ENTERPRISE REFORM ENTERPRISE REFORMS EXPANSION EXPORTS EXTERNAL FINANCE FINANCIAL CRISIS FINANCIAL SUPPORT FIRM SIZE FOREIGN CAPITAL FOREIGN DIRECT INVESTMENT FOREIGN ENTERPRISES FOREIGN FIRMS GDP PER CAPITA GROWTH PERFORMANCE GROWTH RATE GROWTH RATE OF SALES GROWTH RATES HIGHER VOLATILITY INCOME INDIVIDUAL FIRM INDIVIDUAL FIRMS INDUSTRIAL ECONOMY INNOVATION INSURANCE INTANGIBLE INTANGIBLE ASSETS INTERNATIONAL BUSINESS JOINT OWNERSHIP LABOR FORCE LABOR MARKET LABOR MARKET FLEXIBILITY LABOR MARKETS LONG-TERM INVESTMENT MACROECONOMIC VOLATILITY MARKET ECONOMY MARKET INFORMATION MERGERS MOTIVATION NATIONAL INCOME NEW PRODUCT OPEN UNEMPLOYMENT OUTPUT OUTPUT GAP OUTPUT PER CAPITA OUTPUT VOLATILITY OVERALL VOLATILITY PENSION PENSION REFORMS PENSIONS PLANNED ECONOMIES PRIVATE CAPITAL PRIVATE ENTERPRISES PRIVATE INVESTMENT PRIVATE SECTOR PRIVATIZATION PRODUCTIVITY PRODUCTIVITY GROWTH PRODUCTIVITY INCREASES RAPID DEVELOPMENT REAL GDP RESERVE BANK RETIREMENT REVIEW OF ECONOMICS SIZE OF FIRMS SMALL FIRMS SOCIAL PROTECTION STANDARD DEVIATION TOTAL OUTPUT TURNOVERS UNEMPLOYED UNEMPLOYMENT URBAN WORKERS VOLATILITY WAGE DIFFERENTIALS WAGE DISCRIMINATION WORLD TRADE WORLD TRADE ORGANIZATION Luo, Xubei Zhu, Nong What Drives the Volatility of Firm Level Productivity in China? |
| geographic_facet |
East Asia and Pacific China |
| relation |
Policy Research Working Paper;No. 6846 |
| description |
The enterprise reforms of the 1990s
profoundly changed the structure of the economy in China.
With the deepening of market economy, the share of the
state-owned and collective enterprises declined. Expansion
and contraction, as well as establishment and closure, of
firms became a common phenomenon. The level and volatility
of firm productivity have become increasingly important
aspects of the micro performance of the economy. This paper
uses a firm-level data set collected annually by the
National Bureau of Statistics of China in 1998-2007 to
examine the role of different firm characteristics in
productivity volatility. The paper measures productivity
volatility at the firm level as the standard deviation of
the annual growth rate of productivity. The main objectives
are twofold: first, it examines the variation of
productivity volatility across firms of different
characteristics and their evolution over time; second, it
investigates the sources of productivity volatility at the
firm level in China. The results suggest that in general,
productivity volatility at the firm level has declined over
time in China. Among firms with different characteristics,
large firms, old firms, foreign firms, and firms located in
the coastal provinces are less volatile. Firm size and
location are the two major factors that drive changes in
productivity volatility, one in a positive way and one in a
negative way. Although the gaps of volatility between
smaller firms and larger firms declined, the gaps between
firms located in the coastal provinces and inland provinces increased. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Luo, Xubei Zhu, Nong |
| author_facet |
Luo, Xubei Zhu, Nong |
| author_sort |
Luo, Xubei |
| title |
What Drives the Volatility of Firm Level Productivity in China? |
| title_short |
What Drives the Volatility of Firm Level Productivity in China? |
| title_full |
What Drives the Volatility of Firm Level Productivity in China? |
| title_fullStr |
What Drives the Volatility of Firm Level Productivity in China? |
| title_full_unstemmed |
What Drives the Volatility of Firm Level Productivity in China? |
| title_sort |
what drives the volatility of firm level productivity in china? |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2014/04/19447081/drives-volatility-firm-level-productivity-china-drives-volatility-firm-level-productivity-china http://hdl.handle.net/10986/18327 |
| _version_ |
1764440635560951808 |