country time varying events (country-year FE), and country, sector, and time varying shocks (country-sector-year, FE). Clustered standard errors are used to control for potential autocorrelation within firms (column 8 to capture potential serial correlation) and sectors (column 9).

_Table 11. Results for Return on Equity_

||||**_Return_**|**_on Equity_**||||||
|---|---|---|---|---|---|---|---|---|---|
||(1)|(2)|(3)|(4)|(5)|(6)|(7)|(8)|(9)|
|BOS|-16.17***|-15.34***|-15.24***|-15.29***|-15.27***|-15.48***|-15.45***|-15.45***|-15.45***|
||(0.190)|(0.196)|(0.196)|(0.196)|(0.196)|(0.205)|(0.206)|(0.267)|(0.345)|
|Size|-2.251***|-1.242***|-1.201***|-1.264***|-1.252***|-1.127***|-1.116***|-1.116***|-1.116***|
||(0.034)|(0.036)|(0.036)|(0.036)|(0.036)|(0.037)|(0.037)|(0.048)|(0.076)|
|Age||-0.577***|-0.576***|-0.575***|-0.574***|-0.599***|-0.597***|-0.597***|-0.597***|
|||(0.004)|(0.004)|(0.004)|(0.004)|(0.004)|(0.004)|(0.005)|(0.018)|
|Listing status|||-8.680***|-8.409***|-8.439***|-7.690***|-7.535***|-7.535***|-7.535***|
||||(0.426)|(0.427)|(0.427)|(0.464)|(0.461)|(0.621)|(0.552)|
|Constant|26.97***|31.72***|31.59***|31.79***|31.72***|31.66***|31.60***|31.60***|31.60***|
||(0.121)|(0.128)|(0.129)|(0.129)|(0.129)|(0.131)|(0.132)|(0.167)|(0.285)|
|Observations|6,035,007|5,896,478|5,896,478|5,896,478|5,896,459|5,896,382|5,889,443|5,889,443|5,889,443|
|R-squared|0.026|0.029|0.029|0.030|0.033|0.037|0.044|0.044|0.044|
|Country FE|Yes|Yes|Yes|Yes|Yes|Yes|Yes|Yes|Yes|
|Sector FE|Yes|Yes|Yes|Yes|Yes|Yes|Yes|Yes|Yes|
|Year FE|Yes|Yes|Yes|Yes|Yes|Yes|Yes|Yes|Yes|
|Country-year FE|No|No|No|Yes|Yes|Yes|Yes|Yes|Yes|
|Sector-Year FE|No|No|No|No|Yes|Yes|Yes|Yes|Yes|
|Country-Sector FE|No|No|No|No|No|Yes|Yes|Yes|Yes|
|Country-Sector-Year FE|No|No|No|No|No|No|Yes|Yes|Yes|
|Clustered errors|No|No|No|No|No|No|No|Firm|Sector 2d|

Robust standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1 Note: Return on Equity (ROE) is computed as the ratio between net income and shareholders’ fund *100 (%). This variable is provided directly in the financial statements from ORBIS (BvD). The reference (excluded category) refers to Privately-owned Enterprises (POEs), so results should be interpreted as compared to private firms within the same sector, size, and age, and sector and controlling by the respective fixed effects. Size is measured as the log of total workers in year t-1, age refers to the lagged number of years in the market in t-1. Listed status is a dichotomous variable that takes value 1 if the company is listed in the stock market, 0 otherwise. Fixed effects are included to absorb for potential shocks such as temporary shocks (year-FE), sectoral shocks (sector-FE), time-varying sectoral shocks (sector-year FE), country specific shocks (country-FE), country time varying events (country-year FE), and country and sector specific and time varying shocks (country-sector-year, FE). Clustered standard errors are used to control for potential autocorrelation within firms (column 8 to capture potential serial correlation) and sectors (column 9).

# **_6.2 Intensive margin: Does the level of state participation matter for operational and financial performance?_**

The state has multiple channels to participate in the corporate sector. It is not necessarily restricted to the majority or full shareholding. While BOSs are often majority or fully owned by the state, the state can also be a minority shareholder with mixed ownership with the private sector. In our sample, 58% of the BOSs are fully owned by the state (100%), and 16% are majority-owned (50%-99%). Additionally, 27% of the BOSs in our sample have minority shareholding (10%-49%).

This section explores to what extent the level of state participation as well as involvement of the private sector can influence firm performance. When there is private sector participation, we expect to observe potential gains in performance as private counterparts can contribute with financial, technical, and managerial resources as well as share risks and rewards with the government (UNDP, 2000).

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