China share issue privatization: the extent of its success$

We evaluate the performance changes of 634 state-owned enterprises (SOEs) listed on China’s two exchanges upon share issuing privatisation (SIP) in the period 1994–1998. We find that SIP is effective in improving SOEs ’ earnings ability, real sales, and workers ’ productivity but is not successful in improving profit returns and leverage after privatisation. We also find state ownership having negative impacts on firm performance and legal-person ownership having positive impacts on firm performance after SIP, which suggests that legal persons behave differently from the state government. Surprisingly, foreign ownership does not show uniformly strong, positive impacts on firm performance