Table 1: Descriptive statistics
This table reports summary statistics on main variables and agricultural tax revenue. Panel A represents the summary statistics on the main variables used in the following analysis. Panel B shows the descriptive statistics on fiscal revenue and agricultural taxes at the county level by province. The sample period ranges from 1999 to 2008. All variables are defined in Appendix A.
Panel A: Main variables
Variable
|
N
|
Mean
|
S.D.
|
Min
|
P50
|
Max
|
PrivateShare
|
244,231
|
0.046
|
0.152
|
0
|
0
|
1
|
D_PrivateShare_50
|
244,231
|
0.034
|
0.180
|
0
|
0
|
1
|
D_PrivateShare_30
|
244,231
|
0.065
|
0.246
|
0
|
0
|
1
|
D_PrivateShare_15
|
244,231
|
0.093
|
0.291
|
0
|
0
|
1
|
D_PrivateShare_10
|
244,231
|
0.106
|
0.308
|
0
|
0
|
1
|
ROA
|
244,231
|
0.002
|
0.081
|
-0.294
|
0.001
|
0.333
|
lnAge
|
244,231
|
2.877
|
0.878
|
0.693
|
3.045
|
4.025
|
FixRatio
|
244,231
|
0.468
|
0.240
|
0.019
|
0.458
|
0.961
|
Leverage
|
244,231
|
0.645
|
0.275
|
0.019
|
0.673
|
1
|
lnEmployee
|
244,231
|
5.114
|
1.440
|
1.386
|
5.112
|
8.720
|
lnSize
|
244,231
|
10.21
|
1.832
|
5.897
|
10.19
|
14.90
|
lnInvestFP
|
244,231
|
0.964
|
0.850
|
0
|
0.735
|
4.145
|
lnLaborFP
|
244,231
|
4.142
|
1.541
|
0
|
4.209
|
7.563
|
Panel B: Fiscal revenue and agricultural taxes
Province
|
County N.
|
Agricultural tax ratio
|
Fiscal Revenue
(10,000 Yuan)
|
Agricultural tax
(10,000 Yuan)
|
Mean
|
S.D.
|
P50
|
Mean
|
S.D.
|
P50
|
Mean
|
S.D.
|
P50
|
Anhui
|
105
|
0.195
|
0.14
|
0.19
|
10,790
|
6,257
|
9,346
|
2,229
|
1,944
|
1,903
|
Beijing
|
18
|
0.006
|
0.01
|
0.001
|
189,782
|
187,723
|
103,819
|
659
|
1,112
|
90
|
Chongqing
|
42
|
0.155
|
0.078
|
0.139
|
26,327
|
20,290
|
19,997
|
3,988
|
3,778
|
2,684
|
Fujian
|
90
|
0.111
|
0.097
|
0.081
|
19,113
|
20,414
|
10,675
|
1,347
|
1,095
|
1,120
|
Gansu
|
87
|
0.187
|
0.125
|
0.172
|
4,672
|
5,383
|
3,265
|
619
|
555
|
533
|
Guangdong
|
118
|
0.078
|
0.056
|
0.072
|
64,043
|
304,867
|
12,472
|
4,111
|
15,106
|
811
|
Guangxi
|
116
|
0.107
|
0.08
|
0.103
|
10,775
|
7,139
|
9,092
|
1,109
|
1,206
|
845
|
Guizhou
|
88
|
0.192
|
0.129
|
0.161
|
9,578
|
8,719
|
6,424
|
1,378
|
1,067
|
1,119
|
Hainan
|
21
|
0.091
|
0.062
|
0.105
|
10,538
|
11,327
|
5,981
|
840
|
964
|
596
|
Hebei
|
195
|
0.144
|
0.121
|
0.117
|
10,050
|
11,976
|
6,064
|
1,030
|
1,322
|
635
|
Heilongjiang
|
132
|
0.069
|
0.082
|
0.048
|
6,750
|
10,644
|
3,423
|
450
|
784
|
113
|
Henan
|
158
|
0.174
|
0.142
|
0.135
|
13,904
|
11,031
|
10,367
|
2,009
|
1,593
|
1,962
|
Hubei
|
101
|
0.205
|
0.114
|
0.193
|
13,686
|
11,287
|
11,351
|
2,672
|
2,570
|
1,992
|
Hunan
|
122
|
0.156
|
0.089
|
0.143
|
13,218
|
11,180
|
9,963
|
1,906
|
1,715
|
1,620
|
Inner Mongolia
|
101
|
0.11
|
0.118
|
0.071
|
12,877
|
13,954
|
7,328
|
1,152
|
1,716
|
647
|
Jiangsu
|
104
|
0.117
|
0.079
|
0.117
|
58,951
|
66,894
|
36,042
|
6,001
|
7,544
|
3,919
|
Jiangxi
|
110
|
0.144
|
0.085
|
0.144
|
10,574
|
5,992
|
9,873
|
1,453
|
1,101
|
1,196
|
Jilin
|
60
|
0.121
|
0.077
|
0.098
|
8,497
|
5,656
|
6,859
|
1,095
|
1,148
|
602
|
Liaoning
|
113
|
0.126
|
0.086
|
0.106
|
17,404
|
18,747
|
11,001
|
1,806
|
1,645
|
1,286
|
Ningxia
|
21
|
0.082
|
0.063
|
0.063
|
6,217
|
4,786
|
5,037
|
366
|
307
|
235
|
Qinghai
|
49
|
0.094
|
0.126
|
0.033
|
2,764
|
4,053
|
1,251
|
247
|
308
|
146
|
Shaanxi
|
107
|
0.161
|
0.099
|
0.157
|
10,305
|
13,842
|
5,224
|
1,067
|
1,125
|
614
|
Shandong
|
143
|
0.151
|
0.085
|
0.142
|
32,284
|
23,082
|
24,218
|
4,395
|
4,618
|
3,012
|
Shanghai
|
19
|
0.114
|
0.053
|
0.113
|
330,073
|
233,141
|
289,432
|
39,308
|
32,650
|
32,079
|
Shanxi
|
129
|
0.071
|
0.076
|
0.05
|
7,366
|
6,289
|
5,654
|
359
|
407
|
204
|
Sichuan
|
184
|
0.139
|
0.099
|
0.132
|
9,112
|
12,068
|
5,385
|
1,066
|
986
|
831
|
Tianjin
|
21
|
0.109
|
0.066
|
0.087
|
62,662
|
60,714
|
48,773
|
6,574
|
5,904
|
4,452
|
Tibet
|
74
|
0.001
|
0.003
|
0
|
555
|
630
|
345
|
1
|
3
|
0
|
Xinjiang
|
99
|
0.149
|
0.112
|
0.117
|
8,036
|
9,198
|
4,452
|
685
|
659
|
442
|
Yunnan
|
129
|
0.233
|
0.153
|
0.21
|
10,021
|
13,624
|
5,565
|
1,921
|
2,038
|
1,229
|
Zhejiang
|
89
|
0.105
|
0.06
|
0.106
|
58,635
|
43,842
|
50,847
|
6,145
|
6,658
|
4,536
|
Total
|
2,945
|
0.135
|
0.112
|
0.112
|
20,480
|
75,386
|
8,581
|
2,154
|
5,777
|
959
|
Table 2: Fiscal squeeze and privatization
This table reports OLS regression results of the effect of government fiscal squeeze arising from the loss of agricultural tax on industrial enterprises’ privatization. The dependent variable PrivateShare indicates the share of registered capital held by private investors. The core independent variable Squeeze*After indicates whether the county in which the industrial company is located has been affected by the government fiscal squeeze. Controls denotes the set of control variables as follows: ROA is the ratio of total profits over total assets. lnAge is the natural logarithm of enterprise age (the time of establishment calculated in years). FixRatio is the ratio of changes in net fixed assets plus annual depreciation scaled by the opening total assets. Leverage is the ratio of total liabilities over total assets. lnEmployee is the natural logarithm of the total employees. lnSize is the natural logarithm of the total assets. lnInvestFP is the natural logarithm of the ratio of total outputs over total net fixed assets. lnLaborFP is the natural logarithm of the ratio of total outputs over total employment. Firm (Year) indicates firm (year) fixed effects. Industry*Year indicates industry-year fixed effects. Province*Year indicates province-year fixed effects. Industry*Province*Year indicates industry-province-year fixed effects Heteroskedasticity-robust standard errors are corrected for clustering at region and year level. T-statistics are reported in parentheses. *, **, and *** indicate significance at the 10%, 5%, and 1% level, respectively. All related variables are defined in Appendix A.
|
(1)
|
(2)
|
(3)
|
(4)
|
(5)
|
(6)
|
Dep. Var.
|
PrivateShare
|
PrivateShare
|
PrivateShare
|
PrivateShare
|
PrivateShare
|
PrivateShare
|
Squeeze*After
|
0.008***
|
0.009***
|
0.007***
|
0.008***
|
0.008***
|
0.008***
|
|
(4.59)
|
(3.33)
|
(4.30)
|
(3.61)
|
(4.50)
|
(3.61)
|
Controls
|
No
|
Yes
|
Yes
|
Yes
|
Yes
|
Yes
|
Firm
|
Yes
|
Yes
|
Yes
|
Yes
|
Yes
|
Yes
|
Year
|
No
|
Yes
|
No
|
No
|
No
|
No
|
Industry*Year
|
Yes
|
No
|
No
|
Yes
|
Yes
|
No
|
Province*Year
|
Yes
|
No
|
Yes
|
No
|
Yes
|
No
|
Industry*Province*Year
|
No
|
No
|
No
|
No
|
No
|
Yes
|
Observations
|
244,123
|
244,123
|
244,123
|
244,123
|
244,123
|
244,123
|
Adj. R2
|
0.743
|
0.720
|
0.740
|
0.725
|
0.744
|
0.725
|
Table 3: Dynamic effects and pre-trend tests
This table presents the results of parallel trend test and the dynamic effects of fiscal stress. The dependent variable PrivateShare indicates the share of registered capital held by private investors. Beforek (k=1,2,3) is a dummy that equals 1 if observations of firm i in year t is from k (k=1,2,3) year(s) before the fiscal squeeze shock, and zero otherwise. Current is a dummy variable that equals 1 if observations of firm i in year t is from the event year of the fiscal squeeze shock, and zero otherwise. Afterk (k=1,2,3) is a dummy equal one if observations of firm i in year t is from k (k=1,2,3) year(s) after the fiscal squeeze shock, and zero otherwise. Firm indicates firm fixed effects. Industry*Year indicates industry-year fixed effects. Province*Year indicates province-year fixed effects. Heteroskedasticity-robust standard errors are corrected for clustering at region and year level. T-statistics are reported in parentheses. *, **, and *** indicate significance at the 10%, 5%, and 1% level, respectively. All related variables are defined in Appendix A.
|
(1)
|
(2)
|
Dep. Var.
|
PrivateShare
|
PrivateShare
|
Before3
|
0.001
|
0.001
|
|
(0.52)
|
(0.57)
|
Before2
|
-0.001
|
-0.001
|
|
(-0.72)
|
(-0.69)
|
Before1
|
0.003
|
0.003
|
|
(1.39)
|
(1.35)
|
Current
|
0.003
|
0.002
|
|
(1.46)
|
(1.37)
|
After1
|
0.006***
|
0.006***
|
|
(3.12)
|
(2.99)
|
After2
|
0.011***
|
0.010***
|
|
(3.88)
|
(3.76)
|
After3
|
0.013***
|
0.013***
|
|
(3.92)
|
(3.86)
|
Controls
|
No
|
Yes
|
Firm
|
Yes
|
Yes
|
Industry*Year
|
Yes
|
Yes
|
Province*Year
|
Yes
|
Yes
|
Observations
|
244,123
|
244,123
|
Adj. R2
|
0.743
|
0.744
|
Table 4: Placebo tests
This table presents the results of placebo tests. Panel A reports the results of four placebo tests of generating random treated groups, random year indicators, random private shares, and fake event window. Panel B reports the distribution of placebo tests 1,000 times from the DID regressions by reporting the mean, standard deviation, 5th percentile, 25th percentile, median, 75th percentile, and 95th percentile. In Panel A, Columns 1 reports the results of placebo test of randomly generating treatment groups. FakeSqueeze is a pseudo-treat indicator which takes the value 1 if the firm is located in pseudo-fiscal squeeze counties. Columns 2 reports the results of placebo test for fake-post. FakeAfter is a pseudo-post indicator which takes the value 1 if the pseudo-year is in or after pseudo-year-2006. Columns 3 reports the results of placebo test for random private shares. The dependent variable in Column 3 is Random_Private which is a random privatization indicator. Columns 4 reports the results of placebo test for fake-event-window, and the sample period is from year 2000 to year 2004 (the period before real agricultural tax reform). FakeEventDID is an indicator variable which equals to 1 if the counties where the industrial company is located have been affected by the government fiscal squeeze after pseudo-event-window (in year 2002). Firm indicates firm fixed effects. Industry*Year indicates industry-year fixed effects. Province*Year indicates province-year fixed effects. Heteroskedasticity-robust standard errors are corrected for clustering at region and year level. T-statistics are reported in parentheses. *, **, and *** indicate significance at the 10%, 5%, and 1% level, respectively. All related variables are defined in Appendix A.
Panel A:
|
(1)
|
(2)
|
(3)
|
(4)
|
Dep. Var.
|
PrivateShare
|
PrivateShare
|
Random_Private
|
PrivateShare
|
FakeSqueeze*After
|
0.001
|
|
|
|
|
(0.77)
|
|
|
|
Squeeze*FakeAfter
|
|
0.000
|
|
|
|
|
(0.63)
|
|
|
Squeeze*After
|
|
|
0.002
|
|
|
|
|
(0.77)
|
|
DID_FakeEvent
|
|
|
|
0.000
|
|
|
|
|
(0.19)
|
Controls
|
Yes
|
Yes
|
Yes
|
Yes
|
Firm
|
Yes
|
Yes
|
Yes
|
Yes
|
Industry*Year
|
Yes
|
Yes
|
Yes
|
Yes
|
Province*Year
|
Yes
|
Yes
|
Yes
|
Yes
|
Observations
|
244,123
|
244,123
|
244,123
|
180,959
|
Adj. R2
|
0.743
|
0.743
|
0.004
|
0.739
|
Panel B:
|
N
|
Mean
|
S.D.
|
P5
|
P25
|
P50
|
P75
|
P95
|
Estimator1
|
1,000
|
0
|
0.001
|
-0.002
|
-0.001
|
0
|
0.001
|
0.002
|
t-value
|
1,000
|
0.0420
|
1.005
|
-1.601
|
-0.652
|
0.0500
|
0.757
|
1.607
|
p-value
|
1,000
|
0.493
|
0.286
|
0.054
|
0.247
|
0.490
|
0.739
|
0.952
|
Estimator2
|
1,000
|
0
|
0.001
|
-0.001
|
0
|
0
|
0
|
0.001
|
t-value
|
1,000
|
-0.051
|
1.047
|
-1.766
|
-0.744
|
-0.0440
|
0.654
|
1.680
|
p-value
|
1,000
|
0.491
|
0.299
|
0.043
|
0.215
|
0.485
|
0.757
|
0.950
|
Estimator3
|
1,000
|
0
|
0.003
|
-0.005
|
-0.002
|
0
|
0.002
|
0.005
|
t-value
|
1,000
|
-0.018
|
0.958
|
-1.651
|
-0.643
|
-0.023
|
0.632
|
1.567
|
p-value
|
1,000
|
0.510
|
0.280
|
0.057
|
0.273
|
0.525
|
0.735
|
0.957
|
Table 5: Geographic discontinuity design
This table use geographic information technology based on spatial topological relation to construct adjacent-county-pairs for estimating the effects of government fiscal stress on industrial enterprises’ privatization. The dependent variable PrivateShare indicates the share of registered capital held by private investors. The core independent variable Squeeze*After indicates whether the county in which the industrial company is located has been affected by the government fiscal squeeze. T-statistics are reported in parentheses. *, **, and *** indicate significance at the 10%, 5%, and 1% level, respectively. All related variables are defined in Appendix A.
|
(1)
|
(2)
|
Dep. Var.
|
PrivateShare
|
PrivateShare
|
Squeeze*After
|
0.011***
|
0.011***
|
|
(4.05)
|
(3.91)
|
Controls
|
No
|
Yes
|
Firm
|
Yes
|
Yes
|
Industry*Year
|
Yes
|
Yes
|
Province*Year
|
Yes
|
Yes
|
Observations
|
61,809
|
61,809
|
Adj. R2
|
0.749
|
0.749
|
Table 6: Checking nonrandom determination of fiscal stress
In this table we introduce the Determinants*f(t) into baseline regression for checking the nonrandom determination of agricultural tax reform. Determinants is a vector of the selection criteria which affect the assignment of treatments. f(t) is a polynomial function of time. The dependent variable PrivateShare indicates the share of registered capital held by private investors. The core independent variable Squeeze*After indicates whether the county in which the industrial company is located has been affected by the government fiscal squeeze. T-statistics are reported in parentheses. *, **, and *** indicate significance at the 10%, 5%, and 1% level, respectively. All related variables are defined in Appendix A.
|
(1)
|
(2)
|
Dep. Var.
|
PrivateShare
|
PrivateShare
|
Squeeze*After
|
0.008***
|
0.008***
|
|
(4.57)
|
(4.50)
|
Controls
|
No
|
Yes
|
Determinants*T
|
Yes
|
Yes
|
Determinants*T2
|
Yes
|
Yes
|
Determinants*T3
|
Yes
|
Yes
|
Firm
|
Yes
|
Yes
|
Industry*Year
|
Yes
|
Yes
|
Province*Year
|
Yes
|
Yes
|
Observations
|
244,123
|
244,123
|
Adj. R2
|
0.743
|
0.815
|
Table 7: Robustness tests
This table presents the result of three robustness tests. Panel A shows the basic regression by using alternative indicators of privatization. In Panel A, the dependent variable D_ PrivateSharek(k=10,15,30,50) equals one if the share of registered capital held by private investors is above k%(k=10,15,30,50); otherwise, 0. The independent variable is Squeeze*After indicates whether the county in which the industrial company is located has been affected by the government fiscal squeeze. In Panel B, the dependent variable PrivateShare indicates the share of registered capital held by private investors. The independent variables are FiscalShock*After and AgrRatio*After. Firm indicates firm fixed effects. Industry*Year indicates industry-year fixed effects. Province*Year indicates province-year fixed effects. Heteroskedasticity-robust standard errors are corrected for clustering at region and year level. T-statistics are reported in parentheses. *, **, and *** indicate significance at the 10%, 5%, and 1% level, respectively. All related variables are defined in Appendix A.
Panel A: The alternative measurements of privatization
|
(1)
|
(2)
|
(3)
|
(4)
|
Dep. Var.
|
D_PrivateShare10
|
D_PrivateShare15
|
D_PrivateShare30
|
D_PrivateShare50
|
Squeeze*After
|
0.008**
|
0.009***
|
0.010***
|
0.010***
|
|
(2.30)
|
(2.77)
|
(3.35)
|
(4.50)
|
Controls
|
Yes
|
Yes
|
Yes
|
Yes
|
Firm
|
Yes
|
Yes
|
Yes
|
Yes
|
Industry*Year
|
Yes
|
Yes
|
Yes
|
Yes
|
Province*Year
|
Yes
|
Yes
|
Yes
|
Yes
|
Observations
|
244,123
|
244,123
|
244,123
|
244,123
|
Adj. R2
|
0.733
|
0.726
|
0.706
|
0.668
|
Panel B: The alternative measurements of fiscal stress
|
(1)
|
(2)
|
Dep. Var.
|
PrivateShare
|
PrivateShare
|
FiscalShock*After
|
0.004***
|
|
|
(2.83)
|
|
AgrRatio*After
|
|
0.004*
|
|
|
(1.94)
|
Controls
|
Yes
|
Yes
|
Firm
|
Yes
|
Yes
|
Industry*Year
|
Yes
|
Yes
|
Province*Year
|
Yes
|
Yes
|
Observations
|
244,123
|
244,123
|
Adj. R2
|
0.743
|
0.743
|
Table 8: Government fiscal squeeze and corporate performance
This table examines the first plausible underlying mechanisms through which government fiscal squeeze drives industrial firms to faster privatization process from the perspective of enhancing performance. The dependent variables are performance indicators: ROA is the ratio of total profits over total assets of a firm in a year. ROE is the ratio of total profits over total capital of a firm in a year. The independent variable is Squeeze*After indicates whether the county in which the industrial company is located has been affected by the government fiscal squeeze. Firm indicates firm fixed effects. Industry*Year indicates industry-year fixed effects. Province*Year indicates province-year fixed effects. Heteroskedasticity-robust standard errors are corrected for clustering at region-year level. T-statistics are reported in parentheses. *, **, and *** indicate significance at the 10%, 5%, and 1% level, respectively. All related variables are defined in Appendix A.
|
Panel A
|
Panel B
|
|
(1)
|
(3)
|
(1)
|
(3)
|
Dep. Var.
|
ROA
|
ROE
|
Squeeze*After
|
0.003***
|
0.003**
|
0.026***
|
0.021**
|
|
(3.00)
|
(2.46)
|
(2.93)
|
(2.52)
|
Controls
|
No
|
Yes
|
No
|
Yes
|
Firm
|
Yes
|
Yes
|
Yes
|
Yes
|
Industry*Year
|
Yes
|
Yes
|
Yes
|
Yes
|
Province*Year
|
Yes
|
Yes
|
Yes
|
Yes
|
Observations
|
244,123
|
244,123
|
244,123
|
244,123
|
Adj. R2
|
0.549
|
0.578
|
0.516
|
0.532
|
Table 9: Government fiscal squeeze and corporate tax burden
This table examines the second plausible underlying mechanism through which government fiscal squeeze drives industrial firms to faster privatization process from the perspective of increasing government tax revenue. The dependent variables are tax burden indicators: AddedTax is the total added-value tax standardized by total assets of a firm in a year. TotalTax is the total tax standardized by total assets of a firm in a year. AddedTax1 is the total added-value tax standardized by total revenue of a firm in a year. TotalTax1 is the total tax standardized by total revenue of a firm in a year. The independent variable is Squeeze*After indicates whether the county in which the industrial company is located has been affected by the government fiscal squeeze. Firm indicates firm fixed effects. Industry*Year indicates industry-year fixed effects. Province*Year indicates province-year fixed effects. Heteroskedasticity-robust standard errors are corrected for clustering at region and year level. T-statistics are reported in parentheses. *, **, and *** indicate significance at the 10%, 5%, and 1% level, respectively. All related variables are defined in Appendix A.
Panel A:
|
(1)
|
(3)
|
(4)
|
(6)
|
Dep. Var.
|
AddedTax
|
TotalTax
|
Squeeze*After
|
0.003***
|
0.003***
|
0.004***
|
0.003***
|
|
(3.75)
|
(3.44)
|
(3.85)
|
(3.39)
|
Controls
|
No
|
Yes
|
No
|
Yes
|
Firm
|
Yes
|
Yes
|
Yes
|
Yes
|
Industry*Year
|
Yes
|
Yes
|
Yes
|
Yes
|
Province*Year
|
Yes
|
Yes
|
Yes
|
Yes
|
Observations
|
244,089
|
244,089
|
243,788
|
70,435
|
Adj. R2
|
0.495
|
0.529
|
0.515
|
0.668
|
Panel B:
|
(1)
|
(2)
|
(3)
|
(4)
|
Dep. Var.
|
AddedTax1
|
TotalTax1
|
Squeeze*After
|
0.001**
|
0.001***
|
0.001**
|
0.001**
|
|
(2.55)
|
(2.70)
|
(2.52)
|
(2.46)
|
Controls
|
No
|
Yes
|
No
|
Yes
|
Firm
|
Yes
|
Yes
|
Yes
|
Yes
|
Industry*Year
|
Yes
|
Yes
|
Yes
|
Yes
|
Province*Year
|
Yes
|
Yes
|
Yes
|
Yes
|
Observations
|
70,475
|
70,256
|
70,299
|
70,435
|
Adj. R2
|
0.663
|
0.688
|
0.689
|
0.668
|
Table 10: Responses by oversight government layers
This table presents the heterogenous effects of government fiscal squeeze on privatization attributed to the oversight government layers. In Column 1, all firms are affiliated to the province-level government in the entry year. In Column 2, all firms are affiliated to the city-level government in the entry year. In Column 3, all firms are affiliated to the county-level or below the county-level government in the entry year. The dependent variable PrivateShare indicates the share of registered capital held by private investors. The core independent variable Squeeze*After indicates whether the county in which the industrial company is located has been affected by the government fiscal squeeze. Firm indicates firm fixed effects. Industry*Year indicates industry-year fixed effects. Province*Year indicates province-year fixed effects. Heteroskedasticity-robust standard errors are corrected for clustering at region-year level. T-statistics are reported in parentheses. *, **, and *** indicate significance at the 10%, 5%, and 1% level, respectively. All related variables are defined in Appendix A.
|
ProvinceSOE
|
CitySOE
|
CountySOE
|
(1)
|
(2)
|
(3)
|
Dep. Var.
|
PrivateShare
|
PrivateShare
|
PrivateShare
|
Squeeze*After
|
-0.001
|
0.014***
|
0.010***
|
|
(-0.24)
|
(3.81)
|
(4.18)
|
Controls
|
Yes
|
Yes
|
Yes
|
Firm
|
Yes
|
Yes
|
Yes
|
Industry*Year
|
Yes
|
Yes
|
Yes
|
Province*Year
|
Yes
|
Yes
|
Yes
|
Observations
|
30,350
|
53,970
|
113,427
|
Adj. R2
|
0.785
|
0.749
|
0.760
|
Table 11: Responses by resource misallocation
This table presents the heterogenous effects of government fiscal squeeze on privatization attributed to resource misallocation. In Panel A, we spilt sample into two group (i.e., High V.S. Low) based on the median value of the dispersion between firm revenue productivity and industry revenue productivity. In Panel B, we spilt sample into two group (i.e., High V.S. Low) based on the median value of the dispersion between firm physical productivity and industry physical productivity. The dependent variable PrivateShare indicates the share of registered capital held by private investors. The core independent variable Squeeze*After indicates whether the county in which the industrial company is located has been affected by the government fiscal squeeze. Firm indicates firm fixed effects. Industry*Year indicates industry-year fixed effects. Province*Year indicates province-year fixed effects. Heteroskedasticity-robust standard errors are corrected for clustering at region-year level. T-statistics are reported in parentheses. *, **, and *** indicate significance at the 10%, 5%, and 1% level, respectively. All related variables are defined in Appendix A.
|
DispersionTFPR
|
High
|
Low
|
|
(1)
|
(2)
|
Dep. Var.
|
PrivateShare
|
PrivateShare
|
Squeeze*After
|
0.016**
|
0.008
|
|
(2.38)
|
(1.30)
|
Controls
|
Yes
|
Yes
|
Firm
|
Yes
|
Yes
|
Industry*Year
|
Yes
|
Yes
|
Province*Year
|
Yes
|
Yes
|
Observations
|
11,925
|
10,553
|
Adj. R2
|
0.798
|
0.791
|