Abstract: With the deepening of state-owned enterprise reform, the related theoretical research and reform practice require more complicated mechanism design. Therefore, a more solid and detailed micro-analysis is urgently needed. This paper starts with reviewing the research perspectives of various schools, shifting to the micro-analysis of the new institutionalist economic paradigm, and analyzing the reasons for the internal efficiency loss and external efficiency loss of state-owned enterprises through transaction as the basic economic element. The conclusion is that state-owned enterprises need the dual reform of structure and supervision system. Only under the premise of defining the three-tiered governance structure of state-owned enterprises, classifying and supervising state-owned enterprises (in fact, state-owned capital investment and operation companies), and establishing a modern enterprise system with multiple ownerships in commercial state-owned enterprises can improve the microeconomic efficiency of state-owned enterprises from internal and external and macroeconomic efficiency of the entire society.

Keywords: transaction costs; transaction governance; governance structure; State-owned enterprise reform; classified supervision