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

Huang, Zhangkai ; Li, Lixing ; Ma, Guangrong ; Xu, Lixin Colin

World Bank, Washington, DC

关键词: CAPITALS;    EMPLOYMENT;    UNEMPLOYMENT RATES;    CHECKS;    ACCOUNTING;   

DOI  :  10.1596/1813-9450-7321
RP-ID  :  WPS7321

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Hayek argues that local knowledge is akey for understanding whether production should bedecentralized. This paper tests Hayek’s predictions byexamining the causes of the Chinese government’s decision todecentralize state-owned enterprises. Since the governmentlocated closer to a state-owned enterprise has moreinformation over that enterprise, a greater distance betweenthe government and the enterprise should lead to a higherlikelihood of decentralization. Moreover, wherecommunication costs and the government’s uncertainty over anenterprise’s performance are greater, the government is morelikely to decentralize enterprises so that it can betterutilize local information. This paper finds empiricalsupport for these implications.