Efficiency of Chinese enterprises: Does human resource management matter?

Data Envelopment Analysis (DEA) was applied to Chinese enterprises with different forms of ownership to estimate their efficiency. The efficiency scores obtained were further regressed against scores rating the implementation of Strategic Human Resource Management (SHRM) and other explanatory data. State-Owned Enterprises (SOEs) were the least efficient, whereas foreign-owned firms were the most efficient. Tentative evidence was found of a relationship between SHRM practices and enterprise efficiency, but only in foreign- and collectively owned enterprises, indicating that Chinese enterprises lack management skills or/and are still subject to tight institutional constraints than their foreign-invested counterparts.