Did state-owned enterprises do better during COVID-19? Evidence from a survey of company executives in China.

ABSTRACT

In a survey of 1,182 company executives in China, state-owned enterprises (SOEs) reported less business reductions under COVID-19. This paper examines if SOEs' superior performance was resulted from government support rather than innate ability of coping with the pandemic. We construct a proxy for firm-level government support using firm's human resources (HR) action taken during the outbreak with firm's 2019 China revenue share as an instrument for the HR action variable. After controlling for the proxy for firm-level government support as well as other observed firm characteristics, we find SOEs in the sample performing significantly worse in the pandemic period.