TY - JOUR
T1 - Policy incentives, ownership effects, and firm productivity—Evidence from China's Agricultural Leading Firms Program
AU - Lin, Gan
AU - Takahashi, Yoshifumi
AU - Nomura, Hisako
AU - Yabe, Mitsuyasu
N1 - Funding Information:
We would like to express our deepest thanks to the editor and anonymous referees whose insightful and valuable comments greatly improve the quality and credibility of our paper. We thank all members of the Laboratory of Environmental Economics, Faculty of Agriculture, Kyushu University for the fruitful discussions. This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors.
Publisher Copyright:
© 2022 Economic Society of Australia, Queensland
PY - 2022/3
Y1 - 2022/3
N2 - This study explores the impact of the Agricultural Leading Firms Program (ALFP) on the productivity of China's agro-processing firms utilizing firm-level data from 1998–2013. The propensity score matching difference-in-differences method is used to control for endogeneity. We find that ALFP's implementation promotes the productivity of agro-processing firms. However, this productivity enhancement occurs only in non-state-owned enterprises (non-SOEs); the productivity of SOEs is not affected. Regarding the underlying mechanisms, studies indicate that ALFP's policy incentives for SOEs are mainly in the form of credit support and for non-SOEs as tax incentives and subsidies. Moreover, although policy incentives promote research and development expenditures by both SOEs and non-SOEs, credit support cannot alleviate the overinvestment of SOEs, while tax incentives and subsidies actually improve the investment efficiency of non-SOEs; this may cause the heterogeneous effects by ownership.
AB - This study explores the impact of the Agricultural Leading Firms Program (ALFP) on the productivity of China's agro-processing firms utilizing firm-level data from 1998–2013. The propensity score matching difference-in-differences method is used to control for endogeneity. We find that ALFP's implementation promotes the productivity of agro-processing firms. However, this productivity enhancement occurs only in non-state-owned enterprises (non-SOEs); the productivity of SOEs is not affected. Regarding the underlying mechanisms, studies indicate that ALFP's policy incentives for SOEs are mainly in the form of credit support and for non-SOEs as tax incentives and subsidies. Moreover, although policy incentives promote research and development expenditures by both SOEs and non-SOEs, credit support cannot alleviate the overinvestment of SOEs, while tax incentives and subsidies actually improve the investment efficiency of non-SOEs; this may cause the heterogeneous effects by ownership.
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U2 - 10.1016/j.eap.2022.01.001
DO - 10.1016/j.eap.2022.01.001
M3 - Article
AN - SCOPUS:85124203727
VL - 73
SP - 845
EP - 859
JO - Economic Analysis and Policy
JF - Economic Analysis and Policy
SN - 0313-5926
ER -