State-owned enterprises and economic growth in interaction models: Role of institutional quality

China’s institutional quality and organizational structure have been altered as a result of the 4.0 industrial revolution. Because of this, the role of state-owned enterprises (SOEs) has become even more important since the arrival of the fourth industrial revolution. This study explores whether or not there is a complementarity between SOEs and the quality of institutions in terms of their influence on economic growth for selected regions in China. The data on SOEs is collected for 29 regions (provinces, autonomous regions, or municipalities) of China over the period of 2001 to 2020. The study uses the Cross-Sectional Autoregressive Distributive Lag model (CS-ARDL) approach to estimate the model. The findings indicate that the effect of SOEs is conditioned on the quality of institutions. Our analysis reveals that the quality of a nation's institutions is an important factor to consider when evaluating the effectiveness of SOEs in spurring economic growth.