State‐Owned Enterprises as Semi‐State Actors: Explaining Regulatory Diversity in Developmental Contexts

ABSTRACT

Regulatory intensity varies substantially across jurisdictions, with important implications for market development, fiscal sustainability, and state capacity. Yet existing scholarship has devoted greater attention to the consequences of regulation than to the institutional sources of its subnational diversity. This question is particularly important in developmental contexts, where governments must balance financial risk control with growth‐oriented policy objectives. This study highlights the role of state‐owned enterprises (SOEs) as semi‐state actors positioned between governmental authority and market coordination. We argue that these organizations reshape local regulatory outcomes by mediating between state authority and market activity. Using subnational evidence from China, where centralized regulatory authority coexists with pronounced local variation in implementation, we show that regions with a stronger SOE presence tend to adopt less stringent penalizing regulation. By theorizing SOEs as organizational intermediaries, this study contributes to comparative debates on regulatory governance and uneven policy implementation. More broadly, it offers a transferable framework for understanding how semi‐state actors generate regulatory diversity.