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Using a sample of mixed ownership pilot enterprises in China from 2014 to 2018, we find that mixed ownership reform (MOR) can improve earnings quality. Thus, improving earnings quality (reducing market friction) is a specific mechanism through which MOR affects economic growth. We also find that the effect of government intervention on earnings quality varies across regions. In high-marketization regions, government intervention cater to the market and it has little or marginal effect on the effect of MOR on earnings quality. However, in low-marketization regions, government weakens the effect of MOR on earnings quality. MOR and reduced government intervention have complementary effects on earnings quality. MOR is not a one-size-fits-all formula, and it should be tailor-made according to local conditions (such as marketization levels). [ABSTRACT FROM AUTHOR]

State-owned enterprises (SOEs) play an important role in the Chinese economy and are also crucial instruments for implementing the Party-state's policies and strategic initiatives. SOE reform is not only crucial to China's transformation from an economy overly dependent on exports and investment to one more driven by domestic consumption, but is also a test of the political will and capability of the Chinese authorities to develop a market-based domestic economy. Despite the Chinese government's commitment since 2013 to forging ahead with the SOE reform process, little real progress has been made so far. Reform of the SOEs is a central component of the government's agenda for sustaining domestic economic growth and tightening the political control of the Chinese Communist Party over all aspects of the nation. The current wave of SOE reform has, however, focused on the state's push for consolidation through mergers and acquisitions, rather than pursuit of improving corporate governance. Far from being in retreat, the state is marching in and the market is retreating. This SOE reform process appears to contradict the state's proclaimed commitment to deregulation and development of a market-based competitive economy in China by allowing "the market to play a decisive role". [ABSTRACT FROM AUTHOR]

This paper investigates the impacts of nongovernmental stake, ownership balance, and nonexecutive directors on bank performance and risk taking in city commercial banks (CCBs) in China. We find that ownership balance can improve CCBs' financial performance and reduce their bankruptcy risk as well as nonperforming loan level. Nonexecutive directors can help reduce bankruptcy risk, but have no significant effect on performance or nonperforming loans. The impacts of ownership balance and nonexecutive directors become more prominent when the nongovernmental stake is relatively high, suggesting that mixed ownership reform can promote bank performance and risk control via these two avenues. [ABSTRACT FROM AUTHOR]

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Does ownership transformation affect firm performance? On the basis of an analysis of over 1100 Chinese companies during the period of ownership reform (1997–2003), this paper identifies that, for China that has the world’s largest state sector under transition, the mix of state and private ownership – partial privatisation – emerges as the best performing type of ownership model for Chinese firms. The finding supports the argument that firms can gain the best synergy of both state support and private business strength, which provides a good explanation to the current campaign of mixed ownership for further reform of state enterprises after 2013. [ABSTRACT FROM AUTHOR]