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3-29 Invited Talk - Associate Professor Ma Guangrong, Renmin University of China School of Finance: Hayek, Local Information and the Decentralization of State - Owned Enterprises in China

  • Release date:2017-03-27 08:24:00

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

Speaker: Associate professor Ma Guangrong (School of finance, Renmin university of China)

Time: March 29, 2017, 14:30

Location: Main BLD 418

About the speaker:

    Ma Guangrong is currently an associate professor at the School of Finance, Renmin university of China. He received his bachelor's degree in economics from Southeast University in 2008, PhD in economics from Beijing university in 2013. Research areas mainly include finance and development economics, etc.,

Introduction:

    Hayek (1945) argues that local knowledge is a key for understanding whether production should be decentralized. We test Hayeks predictions by examining the causes of the Chinese governments decision to decentralize state-owned enterprises (SOEs). Since the government located closer to an SOE has more information over that enterprise, a greater distance between the government and the enterprise should lead to a higher likelihood of decentralization. Moreover, where communication costs and the governments uncertainty over an enterprises performance are greater, the government is more likely to decentralize enterprises to better utilize local information. We find empirical support for these implications. 

 

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