Does the participation of non-state shareholders matter for state-owned enterprises' resilience?

This study examines the impact of non-state shareholder participation on the resilience of stateowned enterprises (SOEs) in China during the COVID-19 pandemic. Using daily stock price data of A-share SOEs listed in Shanghai and Shenzhen from the December 1, 2019 to the December 31, 2020, we find that non-state shareholder governance significantly enhances corporate resilience, as evidenced by higher stock returns of partially privatised firms during the crisis period. Our mechanism analysis reveals that introducing non-state shareholders through partial privatisation exerts' 'governance effects' and 'burden-reducing effects', improving internal control and alleviating policy burdens on SOEs, promoting greater corporate resilience. The impact of non-state shareholder governance on resilience is more pronounced for local SOEs and smaller enterprises, which were more severely affected by the pandemic. This study provides important insights for deepening SOE reform, mitigating major risks, and promoting high-quality economic development in China's new era of development.