China's iron and steel industry: Sources of enterprise efficiency and the impact of reform

Abstract

Using Chinese data which by standards of western industrial analysis is deficient but in other respects is quite rich, this paper corrects for these deficiencies and exploits the richness of the data set by (i) investigating the technological properties of China's iron and steel industry, (ii) identifying the sources of productivity variation among enterprises within that industry, and (iii) evaluating the industry's historical productivity performance. The paper explains over eighty percent of the variance in efficiency among 120 enterprises and finds that during the reform period productivity growth within this key industry has accelerated significantly.