Administrative Monopoly, Political Patronage and the Extra-Capital of the State-Owned Firms
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| Title | Administrative Monopoly, Political Patronage and the Extra-Capital of the State-Owned Firms
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| Author | Yang Jisheng and Yang Jianhui |
| Organization | School of Economics, Huazhong University of Science and Technolgy |
| Email | yangjisheng770@sohu.com;suangxue@163.com |
| Key Words | Ownership property; Political patronage; Administrative monopoly; Management capital. |
| Abstract | Rent-seeking of the entitlements sharply increases firms’ management capital. This paper measures the lose efficiency of the state-owned firms result from administrative monopoly and the entitlements rent-seeking, basing on the dynamic response mechanism of firms’ management capital caused by ownership property, market status and economic environment. The empirical findings and the counterfactual comparative simulation experiments show that, political patronage significantly increases management capital of the state-owned firms, its management efficiency is about one-third of the private-owned firms. The management capital of the state-owned firms and the collective-owned firms owns rigidity characteristic, and shows insensitivity to the change of macroeconomics and market environment, while the sensitivity of private-owned firms to economic environment is 5.5 times of the state-owned firms. Market monopoly is benefit to reduce management capital for the private-owned firms, but it has a converse effect on the state-owned firms. The measure of external market environment shows that, the overall market environment becomes worse since 2008, the effective way of optimizing the stated-own economic layout and structure is to open to private capital in core monopoly areas and make it play a marketable role in the stock equity allocation. |
| Serial Number | WP704 |
| Time | 2014-09-19 |
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