Ownership, competition, organizational change, and firm performance: China's experience in privatization

This dissertation examines the dynamic process in which privatization affects economic performance through organizational changes within the government regulated market competition. Specifically, this research, based on China's experience in privatization, explores the relative importance of ownership and competition in firm performance and how their contribution is achieved through the intermediary mechanism of organizational change. These research questions are motivated by the concern to identify the indispensable ingredients and patterns of sound privatization programs.; Economic theory of privatization itself is still inconclusive to justify the rationale for privatization policy. Some theorists even suggest that competition is actually more important than privatization in enhancing economic efficiencies. Meanwhile, both economic theory and organization theory predict that only those privatization policies that bring about positive organizational changes fundamentally different from state owned enterprises (SOEs) and suitable to competitive market environment lead to sustainable efficiency gains. To test these theoretical predictions, this dissertation uses a Triangulation strategy in methodology, combining both quantitative and qualitative perspectives, to examine the interactive relationship between ownership, competition, organizational change, and economic performance.; In the empirical analysis, this dissertation explores whether, even facing the same competitive market structure, SOEs and privatized firms still differentiate each other in performance and organizational characteristics. This research then assesses whether and the extent to which these performance disparities are correlated with their organizational changes. To reinforce the empirical findings, this study further provides a comprehensive descriptive analysis of organizational changes post-privatization through an in-depth qualitative study and then presents a conceptual model explaining the dynamic process in which privatization affects firm performance through organizational change in a government regulated market setting.; The empirical results are consistent with the findings of previous studies that weigh ownership more against competition as policy option in promoting economic efficiency. Moreover, this research provides an organizational change perspective in the examination of privatization, highlighting the importance of organizational change and development to performance disparities post-privatization. This dissertation is the first comprehensive research on privatization through the organizational change perspective, calling for attention of policy-makers to the issue of organizational capital in designing and implementing privatization policies.