Working Paper: CEPR ID: DP8695
Authors: Hang Gao; Johannes Van Biesebroeck
Abstract: We study whether the 2002 deregulation and vertical unbundling of the Chinese electricity sector has boosted productivity in the generation segment of the industry. Controlling explicitly for sources of price-heterogeneity across firms and for firm-fixed effects, we find deregulation to be associated with a reduction in labor input and material use of 6 and 4 percent, respectively. This effect only appears two years after the reforms, is robust to alternative ways of identifying restructured firms, and to the nonrandom selection of restructured firms using a matching estimator. Input use of new state-owned firms that start operations two years into the reform period does not differ significantly anymore from input use of private sector entrants.
Keywords: Productivity; Regulation
JEL Codes: L5; L9; O4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| 2002 reforms (E69) | productivity (O49) |
| 2002 reforms (E69) | labor input (J22) |
| 2002 reforms (E69) | material input (C67) |
| labor input (J22) | productivity (O49) |
| material input (C67) | productivity (O49) |