Abstract: The pyramid ownership structure is one of the effective ways to the decentralization reform of the state-owned enterprises. From the perspective of government decentralization, this paper takes China’s state-owned listed companies in the period of 2007-2014 as the research objects to empirically study the impact of the pyramid ownership structure on the agency cost of state-owned enterprises. The findings show that with the up moving in the pyramid hierarchy of the state-owned listed company, its excess agent costs will be significantly reduced, and this effect will increase with the decrease of the intervention of the municipal government. Further study shows that excess agency costs have a significant negative impact on corporate performance, but reducing the pyramid hierarchy may weaken this negative impact. The above conclusions not only provide new evidences for understanding the economic consequences of the pyramid structure of state-owned enterprises, but also provide a policy reference for improving the governing efficiency of state-owned enterprises.

Key words: pyramid ownership structure; government decentralization; excess agency costs; reform of state-owned enterprises