Abstract:The role of local government intervention in local economy under the background of decentralization reform is not fully studied in existing researches of Chinese companies performance in control transfer. Based on the data of 135 target listed companies, which control right are transferred from 2006 to 2008 in Shenzhen Stock Exchange or Shanghai Stock Exchange, this paper attempts to give empirical evidences of how local government intervention influence companies performance after control transfer under circumstance of Chinese style decentralization. The result shows that compare to the performance in 1 year before control transfer happen, target listed companies overall performance score has been significantly improved in 3 years after control transfer. But the stronger the local government intervention in economy in the year of control transfer, the more likely the increase of overall performance score in 3 years after control transfer become less significant. This means local government intervention has negative effect in the increase of companies performance after control transfer. Accordingly, trying to lower the motive of local government intervention to economy is the important prerequisite for market of control transfer to function effectively.