Note(s): This table presents the mechanism analysis results. Columns (1)-(4) report the government authorization mechanism, and columns (5)-(8) report the agency costs mechanism. The first government authorization measure Burden is the average excess employment during the pre-SASAC period, where excess employment is calculated as the residual from the expected employment regression model. The second government authorization measure Layer is the average number of pyramid layers between SOE and its ultimate state owner during the pre-SASAC period. The first agency cost measure Agencycost is the average ratio of administrative expenses to total revenue during the pre-SASAC period. The second agency cost measure Risktake is the average volatility of earnings during the pre-SASAC period, where earnings volatility is the standard deviation of return on assets (ROA) over the three-year window [t−1, t, t+1]. We report in parentheses t-statistics based on standard errors that are robust to heteroskedasticity. ***p < 0.01; **p < 0.05; *p < 0.10; two-tailed test. See Appendix A for variable definitions