Ownership, performance, and innovation in China's large- and medium-size industrial enterprise sector

Abstract

China's 22,000 large- and medium-size enterprises (LMEs) stand at the pinnacle of Chinese industry. Although they account for less than a fraction of a percent of China's nearly 8 million industrial enterprises, they collectively account for one third of the nation's total industrial output. Using a panel of these enterprise data for 1994-1999, we find a rapidly diversifying ownership structure in which the role of the state is steadily retreating. At the same time, we find considerable variation in measures of performance across ownership types and see emerging within Chinese industry, evidence of high-intensity R&D performers that exhibit substantial innovation capabilities. © 2003 Elsevier Science Inc. All rights reserved.