Title

The efficiency and profitability effects of China's modern enterprise restructuring programme

Document Type

Journal article

Source Publication

Asian Review of Accounting

Publication Date

2008

Volume

16

Issue

1

First Page

74

Last Page

91

Abstract

Purpose – In the mid‐1990s, China introduced the Modern Enterprise System (MES) to selected state‐owned enterprises (SOE). The paper aims to examine whether this reform led to improved efficiency and profitability.

Design/methodology approach – The efficiency and performance of enterprises before and after the economic restructuring are examined. Univariate and multivariate (regression) analyses are used to investigate whether there has been a significant change in an enterprise's performance.

Findings – The paper finds there is no improvement in efficiency and profitability after the restructuring. This can be attributed the lack of improvement to the state's ownership of enterprises, bureaucratic management, and poor corporate governance. These things have to change in order to improve corporate efficiency and performance.

Originality/value – China's reform of SOEs is very important to the economic well‐being of the country. This paper is the first to investigate the MES as applied to wholly state‐owned enterprises.

DOI

10.1108/13217340810872481

Print ISSN

13217348

Full-text Version

Publisher’s Version

Recommended Citation

Chen, G., Firth, M. & Zhang, W. W. (2008) The efficiency and profitability effects of China's modern enterprise restructuring programme. Asian Review of Accounting, 16(1) : 74 - 91. DOI: http://dx.doi.org/10.1108/13217340810872481