Training and productive efficiency in transition economies

While low efficiency is constantly found in enterprises in China, not much is known about its underlying reasons. The present study attempts to fill this gap with particular attention devoted to the effect of training provision on enterprise efficiency. Our results show that there is a positive relationship between training provision and technical efficiency in enterprises. An estimation of group efficiency shows that the present pattern of resource allocation in the state-owned enterprises can enhance their efficiency performance. This is of particular importance for state-owned enterprises in which the allocation of resources is still under the control of the central government.