the period 2011 to 2020. It is based on financial statements and contains balance sheet information such as firm tax identification number, year of incorporation, operating revenue, average number of employees, number of employees at the end of the year, labor cost, fixed assets, total assets, amount of subsidies received from the government,<sup>6</sup> 4-digit NACE industry code, and the county location of the firm. The data has about 1.2 million unique firms, and over 7 million firm-year observations, across the period 2011-2020. The Romania MoF firm-level data did not include a variable that identifies the ownership status of the firm (whether the firm is an SOE), which is the key explanatory variable of interest. To identify whether the firm is an SOE, the analysis relies on the new WBG BOS database.

# 3.2 World Bank Global BOS Database

**The World Bank BOS database maps the footprint of the state within the corporate sector and across economic activities based on a uniform definition** . The BOS dataset tracks all corporations where national or subnational governments have an ownership stake of at least 10%, either directly or indirectly (Dall'Olio et al. (2022a)). In this dataset, corporations are business entities that are (a) capable of generating a profit or other financial gain for their owners, (b) recognized by law as legal entities separate from their owners and with limited liability, and (c) set up for purposes of engaging in market production. The database was built using data from ORBIS and complemented with data from government sources, such as business registries, central depositories, central oversight bodies, and the Ministry of Finance. It tracks several variables on SOEs such as company names, unique company ID, 4-digit NACE code, financial variables such as revenue, employment,  profit and loss for  2019, percent of state ownership stake, and different layers of the ownership chain. The latter two variables allow us to partition SOEs into our analytical categories of ownership degrees and control levels, as  in Table 1 below. The categories in Table 1 are matched to the Romanian MoF firm-level data using the unique tax ID  available in both datasets. Of the 1,416 Romanian SOEs in the BOS database, 1,399 were matched to the MoF firm-level data, with only 17 SOEs not having a match. Of these 17 SOEs, 3 and 11 are central SOEs and local SOEs, respectively, with the other 3 being indirectly owned.

Table 1: SOE Analytical Categories

|Types|Analytical cat|egories|Definitions|
|---|---|---|---|
|**Ownership degrees**|Minority<br>owned|_10-24.9%_|Firms where national or municipal governments hold 10 to<br>24.9 percent stakes.|
|||_25-49.9%_|Firms where national or municipal governments hold 25 to<br>49.9 percent stakes.|
||Majority<br>owned|_50% or_<br>_more_|Firms where national or municipal governments hold 50<br>percent or more stakes.|
|**Control levels**|National vs.<br>subnational|_Centrally_<br>_owned_<br>_SOEs_|Firms where the national government hold 10 percent or more<br>stakes.|
|||_Locally_<br>_owned_<br>_SOEs_|Firms where municipal governments hold 10 percent or more<br>stakes.|

> 6 Subsidies in the dataset are presented as a single continuous variable with the amount granted for any of the following objectives: (i) employment creation; (ii) renewable energy and (iii) fossil fuels. The variable called “subsidies” does not allow to differentiate the types of instruments used (e.g. grants, tax exemptions, tax deferrals, etc).

6