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Starting from the 3rd Plenary Session of the 18th Central Committee of the Communist Party of China held in November 2013, China has begun another round of state-owned enterprise (SOE) reform. By examining policy documents, analysing the pilot SOE s and conducing an empirical study based on a unique dataset of control rights transfers between SOE s and privately owned enterprises in Chinese stock markets during 2014–2019, this study concludes that this round of SOE reform has made China's SOE s stronger and possibly bigger. These findings are important to firms, scholars and policy-makers around the world and make further contributions to the debates on China's SOE reform. [ABSTRACT FROM AUTHOR]

Institutional investors, especially public funds, play an important role in governing listed firms as they grow in Chinese stock markets. We classify each fund as “dedicated,” “transient,” or “mixed,” according to the concentration, turnover, and profit sensitivity of their stock holdings. We find that listed firms with more shares held by dedicated funds have a higher disclosure quality, while firms with more shares held by transient funds have a lower disclosure quality. These findings are consistent in different model settings. In addition, dedicated funds improve the disclosure quality of non-state-owned enterprises more than state-owned enterprises. Dedicated funds can benefit from the lower debt-financing cost and higher stock liquidity of firms with better disclosure quality. [ABSTRACT FROM AUTHOR]