Abstract: The official exchange system has been established as an important arrangement of China’s political system, but can it help to implement the mixed ownership reform in order to realize the effective governance of state-owned enterprises? By selecting 478 state-owned enterprises with change of control rights in the period of 2004-2016 as research samples, this paper conducts an empirical analysis of the influence of the officials exchange system on the probability of transfer of control rights of inefficient state-owned enterprises and the economic consequences. The findings show that the official exchanges can significantly increase the probability of the transfer of control rights of inefficient state-owned enterprises, which is verified when different types of exchanging officials are distinguished. During the exchange period of officials, if the inefficient state-owned enterprises have realized the transfer of control rights, their operational performance can be significantly improved, thus the goal of effective governance can be achieved. The results of the mechanism analysis show that before the changing of control rights of the inefficient state-owned enterprises, if the provincial Party secretary at the location of the enterprise holds the term of office longer, the probability of the transfer of control rights will be greater after the exchanged official takes office. This shows that the exchange of officials helps to break the“network of relations”between the enterprises and local governments, and it is conducive to the implementation of mixed ownership reform.

Key words: officials exchange; transfer of control rights; SOE；excess production capacity