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Abstract

The enterprise reforms of the 1990s profoundly changed the structure of the economy in China. Using a rm-level dataset collected annually during the period of 1998–2007, this paper examines the variation of productivity volatility across rms of different characteristics as well as its evolution over time, and investigates the sources of productivity volatility at the rm level. The results suggest that in general, productivity volatility at the rm level declined over time in China. Large rms, old rms, foreign rms, and rms located in the coastal provinces are less volatile. Firm size and location are the two major factors that drive changes in productivity volatility – one in a positive way and one in a negative way. While the gaps of volatility between smaller rms and larger rms declined, the gaps between rms located in the coastal provinces and inland provinces increas

Cover Page Footnote

This paper was prepared as a background paper of the World Development Report 2014: Risk and Opportunity. The fi ndings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of their affi liated organizations.The authors would like to thank Sandra Poncet for sharing the data, Jean-Jacques Dethier, Russell Pittman, Yanrui Wu, and participants at the ninth International Conference on the Chinese Economy, CERDI-IDREC, University of Auvergne, France (October 2013) for valuable comments.

First Page

64

Last Page

80

Page Count

80

Received Date

University of Warsaw

Revised Date

17 April 2015

Accept Date

15 July 2015

Online Available Date

16 November 2015

DOI

10.7172/2353-6845.jbfe.2016.1.3

JEL Code

C21; D21; E23

Publisher

16 November 2015

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