Jia, Chengcheng; Gu, Shijun - 2022
We study the reform of China’s state-owned enterprises (SOE) with a focus on the corporatization of SOEs. We first … reform for aggregate output and TFP, we build a three-sector firm dynamics model featuring financial frictions and endogenous … firm-type choices. Our calibrated model shows that the SOE reform can increase long-run TFP by encouraging the exit of the …