Who is More Competitive,State-owned or Private Chinese Listed Companies:From the Perspective of Matching Corporate Governance with Management

The nature of controlling shareholders has an important impact on corporate governance and determines ultimately the competitiveness of listed companies.Our empirical study of 3590 Chinese listed companies between 2003 and 2006 shows that both the state-owned and the private companies,in response to institutional and inner requirements,attached great importance to potential competitiveness.In particular,great attention has been paid to the construction of the board system.As a result,corporate governance has significantly improved in listed companies.Specifically,private companies have greater potential competitiveness relative to state-owned companies,but the financial performance of private companies is worse because of the fight over the right of control.State-owned companies have greater financial strength because of monopoly.Such findings imply that stated-owned companies should further optimize ownership structure while substantial shareholders of private companies should cultivate the awareness of rational investment and alliance.