Literature Review on the Efficiency of State-owned Enterprises and Further Discussion on Efficiency Theory

This paper supports the relative efficiency theory of state-owned enterprises (SOEs), arguing that different ownership structures exhibit relative efficiency advantages depending on market conditions, industrial environments, and enterprise sizes. Therefore, SOEs' performance hinges on the alignment between their organizational systems and the broader developmental context. After reviewing the existing literature on SOE efficiency, we outline the general evolution of SOE efficiency since the reform and opening-up period. Starting with a discussion of two competing efficiency theories in economics, we offer a preliminary analysis of the divergent views in the literature. The paper contends that existing total factor productivity (TFP) calculation methods suffer from significant discrepancies in data collection and are marred by the theoretical limitations of neoclassical economics. As a result, findings across studies are often inconsistent, with little reproducibility of conclusions, limiting TFP's effectiveness as a measure of production efficiency. To address this issue, substantial revisions are needed in TFP calculation methods, drawing on Marx's labor theory of value. Such revisions would strengthen the theoretical foundation of measurement research and enhance the reliability and comparability of the results. This, in turn, is crucial for a more accurate understanding of SOEs' current efficiency, particularly concerning the substantial productivity gains observed in SOEs over the past two decades.