Could State-owned shareholders promote the performance of private firms? Evidence from China

ABSTRACT

In recent years, the Chinese government has continued to increase investment in private firms. However, could State-owned shareholders promote the performance of private firms? There is also a lack of direct evidence. This paper serves a useful supplement to this problem. Based on the large sample data of Chinese listed private companies, the empirical results of this paper confirm the U-shaped relationship between the shareholding ratio of State-owned shareholders and firm performance, and the U-shaped relationship will be more significant when the degree of marketization of private firms is low.

KEYWORDS:

• Private firms
• State-owned shareholders
• political connections
• marketization
• performance

JEL CLASSIFICATION:

• C33
• L25
• O31
• P21

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by the National Natural Science Foundation of China [71872027 and 72172024].