Foreign Divestment and High-Quality Development of State-Owned Enterprises

Abstract

In China, state-owned enterprises (SOEs) are a crucial pillar and leading force in the national economy, with their high-quality development having a significant impact on the country's economic progress. In recent years, the pace of foreign investment entering China has notably slowed, and the relocation of foreign enterprises from certain industries has increased, making foreign divestment a reality that cannot be ignored. This paper selects data from Chinese A-share listed state-owned companies from 2013 to 2022 as the initial research sample to empirically analyze the impact of foreign divestment on the high-quality development of SOEs. The study finds that: (1) Foreign divestment significantly inhibits the high-quality development of SOEs. (2) Foreign divestment can suppress the high-quality development of SOEs by exacerbating financing constraints, reducing innovation output, and diminishing corporate competitiveness. (3) Implementing a differentiated strategy intensifies the inhibitory effect of foreign divestment on the high-quality development of SOEs, whereas mixed-ownership reform and the digital economy can mitigate this impact. Additionally, the heterogeneity test in this paper reveals that the inhibitory effect of foreign divestment on the high-quality development of local SOEs is stronger than that on central SOEs. Regionally, the inhibitory effect is most pronounced in the eastern regions. This paper enriches the research on foreign divestment and high-quality development of SOEs, exploring the heterogeneous impacts on central and local SOEs and SOEs in different regions, which aids in formulating targeted policy measures to enhance the risk resistance of SOEs and promote their high-quality development.