Industrial productivity in China's state‐owned enterprises: The textile industry in Guangzhou, 1979–1993

This article examines productivity growth and effects of incentive payments on it in China's state‐owned enterprises. Data spanning the 1979–1993 period were taken from 20 large‐and medium‐scale state‐owned textile enterprises in Guangzhou. The empirical study finds that the sample enterprises experienced an average increase in total factor productivity growth by 1.8% annually. The analysis of the effects of incentive payments on productivity shows that total factor productivity growth is positively tied to increases in retained profits but it bears no significant relationship with increases in bonuses. Besides, the study suggests a positive time trend of total factor productivity growth by 0.8% per year.