The Research On The Interactive Effect Between Market Competition And Government Ownership On Corporate Performance

The performance of state-owned enterprises has been the focus of domestic academic research on corporate governance.At the same time, it is closely related to the status of macro-economy.Nowadays a lot of relevant literature mainly focused on the influence of either the equity nature or the equity ratio on the performance of the company.In this paper,in order to make a difference,the authors studied company performance from the point of view of the interactive effect between the external market mechanism and internal equity nature. Market competition acts as a external mechanism which can supervise and give incentives to the corporate behavior, and it’s also the external conditions the companies confront when they operate and develop. However, state-owned enterprises and private enterprises might have different reactions to competition because of their difference in corporate governance structure.Selected 925 listed companies’data from 2010 to 2014 from 24 industries as the sample, this paper investigated the difference between state-owned enterprises and private enterprises in performance from the perspectives of market competition and arrive at the following conclusions:(1) The performance of state-owned enterprises decreases with the aggravation of the market competition, however the effect of market competition on private enterprises is not significant; (2) In state-owned enterprises, the government directly controlled enterprises’performance is negatively correlated with market competition while the correlation is not significant for the government indirectly controlled enterprises;(3) In the highly competitive industry, the performance of state-owned enterprises is significantly lower than that of private enterprises;In the moderately competitive industry, there is no significant difference between their performance; However, in the the monopolistic industry, state-owned enterprises’performance is significantly better than that of private enterprises;The research results show that the interactive effect between market competition and state ownership on companies" performance certainly exist. These conclusions enrich the research on corporate performance and the theory of socialist market economy, and they are also valuable reference to the development of Chinese companies and the improvement of market structure.