Abstract: The paper models institutional arrangements and technology process into behaviors of State-Owned Enterprises （SOEs） and Non-State-Owned Enterprises （NSOEs）. We derive that the output ratio of SOEs to NSOEs is the endogenous function of SOE property right arrangement, social burden and technology progress difference. The theoretical result is verified by empirical studies, which show that there exists a unique cointegration relationship among SOE-NSOE output ratio, property reformation index, social burden index and technology difference. We conclude the paper by decomposition and forecast of the SOE-NSOE output ratio.