"The Anatomy of Chinese Business Groups: A Hierarchical Network Analysis" (with Ruochen Dai and Xiaobo Zhang)
Presenter: Loren Brandt, Professor of Economics, University of Toronto
Abstract: Drawing on a unique data source--the business registry of the State Administration of Industry and Commerce in China--this paper examines the nature of the hierarchy of China’s leading state-owned and private business groups in China for the period between 2003-2014. We begin by documenting the consolidation within the central SOEs after 2003. Next, and focusing on a few key dimensions of these hierarchies, most notably, their length (number of tiers), size (number of subsidiaries per tier and registered capital), and sectors, we examine the evolution of the structure of these groups over time, with an eye to differences between central SOEs, provincial SOEs and private business groups. We also analyze in detail the mixed ownership within these groups, e.g. the role of state ownership in private groups, and vice-versa. Finally, drawing on supplementary data on sales, assets and profitability, we analyze the behavior of these groups over time. Preliminary analysis suggests a convergence in structure and performance of state and private enterprise groups over this period.
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