Hayek, Local Information, and Commanding Heights : Decentralizing State-Owned Enterprises in China

Hayek, Local Information, and Commanding Heights : Decentralizing State-Owned Enterprises in China

Hayek (1945) argues that local information is key to understanding the efficiency of alternative economic systems and whether production should be centralized or decentralized. The Chinese experience of decentralizing SOEs confirms this insight: when the distance to the government is farther, the SO...

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Bibliographic Details
Main Authors: Huang, Zhangkai, Li, Lixing, Ma, Guangrong, Xu, Lixin Colin
Format: Journal Article
Published: American Economic Association 2017
Subjects:
DECENTRALIZATION
STATE-OWNED ENTERPRISES
COMMUNICATION COSTS
STRATEGIC INDUSTRIES
INDUSTRIAL POLICY
COMPETITION POLICY
Online Access:http://hdl.handle.net/10986/29066
id okr-10986-29066
recordtype oai_dc
spelling okr-10986-290662021-05-25T10:54:42Z Hayek, Local Information, and Commanding Heights : Decentralizing State-Owned Enterprises in China Huang, Zhangkai Li, Lixing Ma, Guangrong Xu, Lixin Colin DECENTRALIZATION STATE-OWNED ENTERPRISES COMMUNICATION COSTS STRATEGIC INDUSTRIES INDUSTRIAL POLICY COMPETITION POLICY Hayek (1945) argues that local information is key to understanding the efficiency of alternative economic systems and whether production should be centralized or decentralized. The Chinese experience of decentralizing SOEs confirms this insight: when the distance to the government is farther, the SOE is more likely to be decentralized, and this distance-decentralization link is more pronounced with higher communication costs and greater firm-performance heterogeneity. However, when the Chinese central government oversees SOEs in strategic industries, the distance-decentralization link is muted. We also consider alternative agency-cost-based explanations, and do not find much support. 2017-12-20T20:58:13Z 2017-12-20T20:58:13Z 2017-08 Journal Article American Economic Review 0002-8282 http://hdl.handle.net/10986/29066 CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank American Economic Association Publications & Research :: Journal Article 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
topic DECENTRALIZATION
STATE-OWNED ENTERPRISES
COMMUNICATION COSTS
STRATEGIC INDUSTRIES
INDUSTRIAL POLICY
COMPETITION POLICY
spellingShingle DECENTRALIZATION
STATE-OWNED ENTERPRISES
COMMUNICATION COSTS
STRATEGIC INDUSTRIES
INDUSTRIAL POLICY
COMPETITION POLICY
Huang, Zhangkai
Li, Lixing
Ma, Guangrong
Xu, Lixin Colin
Hayek, Local Information, and Commanding Heights : Decentralizing State-Owned Enterprises in China
geographic_facet East Asia and Pacific
China
description Hayek (1945) argues that local information is key to understanding the efficiency of alternative economic systems and whether production should be centralized or decentralized. The Chinese experience of decentralizing SOEs confirms this insight: when the distance to the government is farther, the SOE is more likely to be decentralized, and this distance-decentralization link is more pronounced with higher communication costs and greater firm-performance heterogeneity. However, when the Chinese central government oversees SOEs in strategic industries, the distance-decentralization link is muted. We also consider alternative agency-cost-based explanations, and do not find much support.
format Journal Article
author Huang, Zhangkai
Li, Lixing
Ma, Guangrong
Xu, Lixin Colin
author_facet Huang, Zhangkai
Li, Lixing
Ma, Guangrong
Xu, Lixin Colin
author_sort Huang, Zhangkai
title Hayek, Local Information, and Commanding Heights : Decentralizing State-Owned Enterprises in China
title_short Hayek, Local Information, and Commanding Heights : Decentralizing State-Owned Enterprises in China
title_full Hayek, Local Information, and Commanding Heights : Decentralizing State-Owned Enterprises in China
title_fullStr Hayek, Local Information, and Commanding Heights : Decentralizing State-Owned Enterprises in China
title_full_unstemmed Hayek, Local Information, and Commanding Heights : Decentralizing State-Owned Enterprises in China
title_sort hayek, local information, and commanding heights : decentralizing state-owned enterprises in china
publisher American Economic Association
publishDate 2017
url http://hdl.handle.net/10986/29066
_version_ 1764468410359480320

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