중국 국유기업 민영화: 비효율성 전가 vs. 효과적 시장 타이밍

Abstract

In this study, we test five sets of conventional theories with respect to privatization of state-owned enterprises (SOEs) in the transitional economies like China: the efficiency hypothesis, the market liberalization hypothesis, the soft-budget hypothesis, and the financial liability hypothesis, and the constraint hypothesis, In addition, we propose and test another hypothesis of our own, namely the market timing hypothesis, based on the efficient or rational stock market timing behaviors of SOEs in privatization for their success of privatization and for the success of long-term investors as in the developed market economy. With 12,742 observations for most SOEs in China that went public on Shanghai Stock Exchange (SHSE) and Shenzhen Stock Exchange (SZSE) for the period 1990-2012, we perform empirical tests for the six hypotheses by using firm-level data and report the following findings. First, the likelihood of privatization for the whole sample increases with higher ROA, rejecting the efficiency hypothesis in that inefficient SOEs can improve their efficiency though privatization. While it decreases with ROA for the profitable firms, it increases with higher ROA for the unprofitable firms. For the separated groups, SOEs can improve their efficiency for better ROAs though privatization, supporting the efficiency hypothesis. Second, the results are mostly same in the models with net income level instead of profitability, which is related to the financial liability hypothesis. Third, the likelihood of privatization for the whole sample increases for firms during the years of stock market liberalization for foreign investors, supporting the market liberalization hypothesis, also for both profitable firms and unprofitable ones. Fourth, the likelihood of privatization for the whole sample increases for firms with positive free cash flows, rejecting the soft budget constraint hypothesis, also for both profitable firms and unprofitable ones. Fifth, the likelihood of privatization for the whole sample increases for firms with higher debt leverage, which is against the constraint hypothesis. While it increases with higher debt ratio for the profitable firms, it decreases with higher debt ratio for the unprofitable firms, the latter supporting the hypothesis. Basically, the conventional hypotheses are mostly rejected as a whole, especially with respect to the soft budget constraint hypothesis while efficiency hypothesis and financial liability hypothesis are supported for profitable firms only, although the market liberalization hypothesis is evidenced to support the effects of the government regulation to expedite privatization of SOEs prior to market liberalization in more recent years. Unlike conventional privatization theories on SOEs in the economies of transition, the test results fully support our market timing for the whole sample and for both profitable firm group and non-profitable firm group. Thus, the central Chinese government or local ones support the privatized firms and public investors by finding appropriate market timing with relatively at a lower PER or stock price level relative to EPS in order to the financial burden of buyers of the government.