This paper studies the relationship between accounting profits and efficiency of manufacturing enterprises in Shanghai during the period of 1989-1992 and examines which factors affect the profitability of manufacturing enterprises. In 1990, the industrial reform was sped up, a Chow test is used to test for the presence of any structural break and our empirical test confirms its presence. In addition, this paper also tests for the presence of ownership effects on profits. Our results indicate that the profits of international joint ventures are more persistent than the rest of ownership types and industries.
Chow, K. W. C., & Fung, K. Y. M. (1996). Profitability and technical efficiency: A performance evaluation of international joint ventures in Shanghai's manufacturing industries (HKIBS Working Paper Series 003-967). Retrieved from Lingnan University website: http://commons.ln.edu.hk/hkibswp/3