DOIAbstract
An analysis of the production reports on a panel of state factories in Guangdong province, China, during 1980-1987, reveals very rapid TFP growth. By linking factory performance with local characteristics, we find that the overall market environment has a significant positive impact on the state factories. Even without privatization or similarly drastic reform measures, these factories show remarkable responsiveness to market incentives. Detailed examinations of labor force composition also indicate market-oriented changes in factory operations. The results call for more micro-level productivity studies in East Asia, and offer a new perspective on the reform of state enterprises more generally. (C) 1999 Elsevier Science B.V. All rights rese...