Market liberalization and firm performance during China's economic transition

Seung Ho Park (First Author), Shaomin Li (Participant Author), David K Tse (Participant Author)

Research output: Contribution to journalJournal

195 Citations (Web of Science)


This paper examines the impact of market liberalization on firm performance through institutional changes during the economic reform in China. The conceptualization focuses on the decentralization of control, ownership restructuring, and industrial policy as the primary institutional changes to implement market liberalization in China. These institutional changes affect firm performance by shaping managerial incentives, affecting transaction and agency costs, and making selective resource allocations across and within industries. Using a large-scale data set including 23,577 firms between 1992 and 1996, the study examines how market liberalization affects the profitability and productivity of Chinese firms and the relationship between ownership change and the performance of state-owned enterprises.
Original languageEnglish
Pages (from-to)127-147
JournalJournal of International Business Studies
Issue number1
Publication statusPublished - 2006

Corresponding author email


  • economic transition
  • firm performance
  • market liberalization

Indexed by

  • FT
  • Scopus
  • SSCI


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