Does External Monitoring from the Government Improve the Performance of State-Owned Enterprises?
利用中国政策变化和地理位置差异，研究政府外部监督对国企绩效的影响，发现加强监督能减少采购中的管理层侵占和生产管理中的偷懒行为。
Abstract In this paper we investigate the impact of external monitoring from the government on state-owned enterprise performance, using the variation in monitoring strength arising from a nationwide policy change and firms’ geographic location in China. We utilise a structural approach to estimate input prices and productivity separately at the firm level using commonly available production data. We show that enhanced external monitoring, as a key component of corporate governance, can substantially reduce managerial expropriation in procurement (proxied by input prices) and shirking in production management (proxied by productivity). The results suggest that government monitoring can be an effective policy instrument to improve state-owned enterprise performance.