Can mixed-ownership reform boost the digital transformation of state-owned enterprises?

Abstract

Under the background of the mixed-ownership reform of state-owned enterprises (SOEs), we investigate the involvement of non-SOEs shareholders in fostering the digital transformation of SOEs. We find that the active engagement of non-SOEs shareholders plays a pivotal role in expediting the digital transformation process of SOEs. Specifically, we identify two potential ways through which the reform promotes digital transformation in SOEs: the reduction of agency costs and the enhancement of executives’ risk-taking propensities. Our empirical findings substantiate the notion that mixed-ownership reform serves as a catalyst for digital transformation, which is a crucial driver of long-term sustainability and growth for SOEs. Our heterogeneity testing indicates that mixed-ownership reform has a more profound impact on advancing the digital transformation of local SOEs and those operating in competitive industries. Overall, we provide novel insights into the integration advantages of mixed-ownership reform by examining the determinants of digital transformation in SOEs from the perspective of ownership structure. These findings offer valuable guidance to policymakers and corporate leaders aiming to facilitate digital transformation in SOEs.