tracks ownership of state business entities with at least 10 percent stake in over 90 countries, including Romania. The first part of the paper examines whether the degree of ownership and control levels of SOEs matter for differences in performances—in terms of employment, average wages, assets per worker, investment, and (labor) productivity—between SOEs and POEs over the 2011-2019 period. The ownership degrees analyzed are _minority owned SOEs with 10 to 24.9 percent stakes_ , _minority owned SOEs with 25 to 49.9 percent stakes_ and _majority owned SOEs with at least 50 percent ownership stakes_ . Control levels mean (a) whether the SOE is owned by the central government (i.e., _centrally owned SOEs_ ) or local governments (i.e., _locally owned SOEs_ ) and (b) whether the SOE reports to directly to a government agency, be it central or local government agencty (i.e., _directly owned SOEs_ ), or indirect because the SOE is a subsidiary of an SOE that reports directly to a central or local government agency (i.e., _indirectly owned SOEs_ ). The first part also assesses government subsidy allocations to SOEs and POEs. The second part of the paper assesses whether Romanian SOEs acted as buffers during the first year of the COVID-19 pandemic (i.e., 2020) and the potential implications of subsidy receipt on performance during this crisis period. The final part investigates how the presence of SOEs in markets correlates with measures of allocative efficiency and other market outcomes.

**The novelty of this work is related to the fact that the paper compares performance differences across varying SOE ownership degrees and control levels relative to POEs, also considering key government interventions through subsidies** . Previous studies on Romania only assessed performance differences between SOEs in general and POEs or those between majority owned SOEs and POEs. None have assessed how the performance of SOEs owned by local governments and those owned by the central government, or SOEs that report directly to government agencies and those that do not, compared to that of their private peers. This paper contributes to the debate in Romania, and the literature in general, by shedding light on SOE performance along different ownership degrees and control levels, also considering the role of subsidies for firm performance, including during the early period of COVID-19.

**The main findings suggest that, first, Romanian SOEs employed more people, had larger assets per worker, and paid better wages, on average, than their POE peers but were less productive over the 2011-2019 period** . They also experienced higher growth in terms of jobs, total assets, and labor productivity than their private peers. SOEs, however, saw slower expansion in average wage. Majority owned, directly, and locally owned SOEs drove these results. The majority owned, directly, and locally owned SOEs also received more government subsidies than POEs. Second, relative to POEs, Romanian SOEs seemed to have weathered better some of the early negative effects that the COVID-19 downturn had on revenues, jobs, and wages. Third, the presence of Romanian SOEs in markets may limit the entry of new private competitors and undermine the efficient allocation of resources across firms within sectors.

**The rest of the paper is organized as follows** . Section 2 reviews the literature on how SOEs perform relative to POEs along the main research aspects of the study. Section 3 discusses the two main datasets used for the analyses in this study, while Section 4 provides the empirical methodologies underlying the main findings. Section 5 presents the main results and Section 6 concludes.

# 2. Related Literature

**A large strand of literature has examined the performances of SOEs relative to POEs in Romania** . The first strand is the literature examining SOEs’ financial and productivity performances  relative to POEs in Romania. Most of these studies find that SOEs are less productive. For instance, Marrez (2015) highlights that Romanian SOEs generate lower revenue per employee (i.e., are less productive) compared to POEs, suggesting that SOEs seem to be over-staffed compared to POEs. A similar exercise by the European

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