What question did this study set out to answer?

This research aims to explore how state-owned enterprises (SOEs) transmit fiscal policy shocks in China.

The role of SOEs in the transmission of fiscal policy shocks in China

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Analysis reveals SOEs respond differently to fiscal shocks in China, indicating varying impacts on investment and government support.

This research aims to explore how state-owned enterprises (SOEs) transmit fiscal policy shocks in China.
Utilized a structural VAR model with macroeconomic data.
Incorporated firm-level data through a panel model.
Identified fiscal shocks using Bayesian methods.
Applied a local projections framework for deeper analysis.
SOEs react fundamentally differently than non-SOEs to fiscal shocks.
Both SOEs and non-SOEs benefit from fiscal stimulus, but SOEs face crowding out during government sector expansions.
SOEs in strategic industries receive consistent government support.
SOE investment leads non-SOE investment under tax-cut-led stimulus, but this effect disappears with spending-led stimulus.

El-Shagi et al. (2026) studied this question.

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