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April 12nd, MA Guangrong (Renmin University of China)

2017-04-10 02:54:00 作者:

【Topic】Hayek, Local Information and the Decentralization of State-Owned Enterprises in China

【Speaker】MA Guangrong, associate professor

【Time】15:30-17:00pm, April 12nd, 2017

【Venue】Room 702, Main Building, Campus on Southern College Road, CUFE



Hayek (1945) argues that local knowledge is a key for understanding whether production should be decentralized. We test Hayek’s predictions by examining the causes of the Chinese government’s decision to decentralize state-owned enterprises (SOEs). Since the government located closer to an SOE has more information over that enterprise, a greater distance between the government and the enterprise should lead to a higher likelihood of decentralization. Moreover, where communication costs and the government’s uncertainty over an enterprise’s performance are greater, the government is more likely to decentralize enterprises to better utilize local information. We find empirical support for these implications.



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