This paper studied the relationship between business performance and the ownership
structure of firms focusing on Chinese state owned enterprises (SOEs) using a firm level
panel data set of China from 1999 to 2011. By classifying all firms into different types based
on their ultimate controlling shareholders, we found that SOEs in general underperform in
the marketplace than private enterprises. However, among the SOEs in our sample, the
SOEs controlled by central government outperformed all types of firms because they offered …