The influence of the state on firms in the global economy is alive and well. States have become dominant owners of companies in many countries around the world. Firms have also increasingly established political connections to access resources and improve their competitive positions. Nonetheless, our understanding of how state ownership and political connections affect firm performance remains limited and marked by conflicting findings. Using meta-analytical techniques on a sample of 210 studies spanning across 139 countries, we examine two key research questions: (1) How do state ownership and political connections affect firm strategies and financial performance, and (2) How does firm-level strategic decision-making mediate the relationships between state ownership, political connections, and firm financial performance. Our findings show that state ownership has a small negative effect on firm financial performance and that political connections have no direct consequences for performance. However, we find evidence that both state ownership and political connections have a profound effect on the strategies firms pursue, such as financial leverage, R&D intensity, and internationalization and that these strategies play a mediating role in the state ownership – firm performance relationship. We conclude with some suggestions for fruitful future research in further connecting these two important and timely research fields.