Mixed Ownership Reform Research Articles

Can Reverse Mixed-Ownership Reform Promote Green Transformation of Private Enterprises?

The private sector greatly influences China's economy, which is crucial for fostering consistent economic growth. This paper takes A-share listed private enterprises (PEs) from 2009 to 2022 as the research object, uses the time-series regime-switching detection method to detect the changepoints of reverse mixed-ownership reform (RMOR) of PEs, and utilizes the staggered difference-in-difference (DID) model to investigate the impact effect and mechanism of the RMOR policy on the green transformation (GT) of PEs. The results show that the RMOR significantly promotes the GT of PEs. Additional mechanism tests reveal that the RMOR will lower the level of internal governance and impede the GT of PEs. However, it will help alleviate the financing constraints of PEs and promote their GT. The results of the moderation analysis reveal that RMOR has a greater impact on the GT of small and medium-sized enterprises (SMEs) compared to large-scale enterprises. At the industry level, RMOR exerts a more significant influence on capital-and technology-intensive industries than on labor-intensive ones. Additionally, RMOR impacts the GT of PEs in regions with lower government regulatory intensity more than in regions with higher regulatory intensity. The study's findings provide new empirical insights, decision-making tools, and innovative perspectives for the GT of PEs.

Research on Mixed Ownership Reform of State-Owned Enterprises from the Perspective of Marxist Political Economy

Under China’s socialist system, state-owned enterprises are key forces driving the economic trajectory and providing strong momentum. These enterprises not only bear the crucial responsibility of advancing the process of national modernization but also serve as the core of the national economic lifeline through their irreplaceable status and function amidst changing times. In the new era, with the advent of the technological revolution and the wave of globalization, state-owned enterprises face unprecedented opportunities and challenges. As a significant aspect of state-owned enterprise reform, the mixed ownership reform is not only a transformation in the structure of enterprise ownership but also a reflection of China’s broader, comprehensive reform efforts. By deeply advancing this reform, it will help optimize the allocation of state-owned assets and significantly boost technological and management innovation within state-owned enterprises, ensuring their competitiveness in the intense market environment. Therefore, this paper will conduct an in-depth analysis of the mixed ownership reform of state-owned enterprises from the perspective of Marxist political economy.

The accountability system for operation and investment and audit quality of state-owned enterprises

Based on the accountability system for illegal operation and investment of state-owned enterprises (SOEs), this paper uses A-share listed companies in China from 2013 to 2021 as a research sample to empirically test the impact of operation and investment accountability on the audit quality of firms. The results show that after the implementation of the accountability system, the audit quality of SOEs is significantly improved, and the results hold after a series of robustness checks. Mechanism tests suggest that reducing misconducts of managers, inhibiting earnings management and improving the quality of internal control can explain the effects of operation and investment accountability. Heterogeneity analyses suggest that the positive effect of operation and investment accountability on the audit quality of SOEs is more pronounced for firms in poor business environment, with low level of digital transformation and low degree of mixed-ownership reform. Further tests on economic consequence suggest that operation and investment accountability increase economic value added of state-owned assets by improving the effectiveness of auditing supervision. This paper extends the stream of literature on SOEs' auditing from the perspective of accountability, and provides practical implications on improving the quality of government monitoring measures and promoting the update of governance capacity and governance system.

Reverse mixed ownership reform and financial risks in private enterprise

The mixed ownership reform is an important part of the economic restructuring in our country. In addition to the participation of non-state-owned capital in soes, it is also more and more common for state-owned capital to participate in the reverse mixed ownership reform of private enterprises. As an important force in China's economic development, the national economy has entered a new normal in recent years, and due to the impact of COVID-19, the Sino-US trade war and other events, many private enterprises have fallen into financial crisis and entered a "wave of closure." Based on this background, this paper empirically studies the impact of state-owned capital shareholding on the financial risk of private enterprises by using the sample of A-share listed enterprises in Shanghai and Shenzhen Stock exchanges from 2007 to 2021. In addition, this paper also discusses the influencing mechanism from two aspects of resource acquisition and governance supervision, and further analyzes that the effect of reverse mixed ownership reform of private enterprises on reducing financial risk mainly comes from the shareholding of state-owned non-financial institutions. This paper enriches the research on the economic consequences of reverse mixed ownership reform and the influencing factors of financial risks, and provides new ideas for improving the ability of private enterprises to prevent financial risks and promoting the healthy and stable development of private enterprises.

Interdependence of heterogeneous blockholders: Evidence from China

The co-holding of interdependent pairs of heterogeneous blocks can provide firms with stable financial support. The interdependence of heterogeneous blockholders’ investment decision has become an important frontier in the financial literature on large shareholders. In this paper, we study the interdependence of heterogeneous blocks in China. We find significant positive interdependence among blockholders of the same type. In heterogeneous block pairs, the financial–private pair shows positive interdependence. The findings are in contrast to those observed in the US. Under the mixed-ownership reform in China, our findings suggest the potential for cooperation among multiple blocks of the same type rather than between heterogeneous strategic partners.

Reverse mixed-ownership reform and earnings quality of Chinese private enterprises: from the perspective of state-owned capital participation

ABSTRACT This paper employs a multiple regression model to empirically investigate the economic effects of Chinese private enterprises’ reverse mixed-ownership reform from the perspective of earnings quality. The results indicate that state-owned capital participation primarily enhances private enterprises’ earnings quality by augmenting its resource support effect in obtaining government subsidies. Meanwhile, a certain degree of checks and balances is required for state-owned capital to participate in the process to mitigate the second type of principal-agent problem to exert a governance supervision effect. Furthermore, state-owned capital participation does not contribute to the value appreciation of private enterprises solely through improving earnings quality.

Research on the Mechanism of Employee Stock Ownership on Corporate Performance under the Background of Mixed Reform

With the deepening of the mixed ownership reform of state-owned enterprises, the employee stock ownership plan that was once suspended has been started again, and the government has clearly proposed employee stock ownership as an important way of mixed ownership reform. Based on the background of the current mixed reform of state-owned enterprises, this paper analyzes the mechanism of employee stock ownership on the performance of state-owned enterprises from four dimensions: corporate governance, corporate operation, financial competitiveness and market effect, further expands the research perspective, and provides references for the implementation of employee stock ownership plans in state-owned enterprises in the future and for relevant departments to analyze the problems in the pilot process of employee stock ownership.

Information matters: The effectiveness of mixed-ownership reform in mitigating financial constraints

Due to the unhealthy principal-agent relationships prevalent in state-owned enterprises (SOEs), these enterprises often lack transparency in financial reporting and other critical information. Drawing on signaling theory, this study examines the impact of mixed-ownership reform (MOR) on financial constraints in Chinese SOEs. Using data from listed manufacturing SOEs between 2009 and 2019, we find that every 0.1 increase in the proportion of non-state shareholders, a proxy for MOR intensity, is associated with an average 2.34 ‰ reduction in financial constraints. This mitigation in constraints primarily arises from decreased information asymmetry between enterprises and the external capital market. Specifically, MOR promotes corporate information disclosure, which sends quality signals to investors, while simultaneously reinforcing corporate governance, which projects intention signals to capital markets. Notably, the effectiveness of MOR in alleviating financial constraints is more significant in capital-intensive and information-sensitive industries, as well as in central SOEs. These findings not only highlight the critical role of MOR in alleviating information asymmetry within SOEs, but also provide valuable insights for similar reforms aimed at advancing sustainable development of SOEs in other countries.

Shareholder heterogeneity, financing constraints, and organizational resilience: Mixed-ownership reform in Chinese private enterprises

Private enterprise development encounters numerous challenges. China encourages state-owned enterprises to acquire equity stakes in private enterprises, thereby facilitating development of private enterprises through reverse mixed-ownership reform. To test the effectiveness of this approach, we focus on the impact of state-owned equity on the organizational resilience of private enterprises. Using empirical research methods and data from A-share listed Chinese companies from 2009 to 2022, we find that reverse mixed-ownership reform is significantly and positively correlated with the organizational resilience of private enterprises. Further analysis reveals that involvement of shareholders from state-owned enterprises can bolster the organizational resilience of private enterprises by mitigating their financing constraints. This paper extends the research on the mechanism by which a heterogeneous ownership structure can impact the organizational resilience of private enterprises and offers insights for private enterprises on how to bolster their organizational resilience through mixed-ownership reform.

Do Green Finance Policies Inhibit the Financialization of Manufacturing Enterprises? Empirical Evidence Based on a Quasi-Natural Experiment with the “Green Credit Guidelines”

Against the background of the increasing financialization of manufacturing enterprises, whether green financial policies can inhibit the financialization of manufacturing enterprises is a major practical issue worth exploring. It can help government departments to guide the sustainable development of the real economy of enterprises, effectively curbing the trend of over-financialization of enterprises, thus preventing potential systemic risks and safeguarding the sustainable development of the economy. Because the green credit guidelines function as a more mature development of green financial policies, this paper takes Chinese A-share listed companies from 2005 to 2022 as the research sample, adopts the propensity score matching and double difference method, and constructs a quasi-natural experiment with the “Green Credit Guidelines” as the policy shock to analyze the multiple impact effects of green financial policies on the financialization of manufacturing enterprises. The results of the study show that (1) green finance policy has a significant inhibiting effect on the financialization of manufacturing enterprises; (2) due to the different motives of manufacturing enterprises in holding financial assets, green finance policy has a more significant inhibiting effect on the long-term financialization of “substitution”; (3) state-owned enterprises (SOEs) bear more social responsibilities and have credit advantages. Green finance policy has a more obvious inhibiting effect on the financialization of non-state-owned manufacturing enterprises; (4) major shareholders can play a better supervisory role in enterprises with high equity concentrations, so green finance policy has a more significant inhibiting effect on the financialization of manufacturing enterprises with low equity concentrations; (5) financing constraints have a masking effect in green finance policy and enterprise financialization. Based on this, this paper puts forward the following targeted recommendations. For the governmental level: first, to establish a sound manufacturing credit system; second, to focus on enterprise-financing constraints. For the enterprise level: first, to optimize the asset structure to promote transformation; second, to deepen the mixed ownership reform of state-owned enterprises.

Performance Study on Reverse Mixed-Ownership Reform of Private Enterprises

Performance Study on Reverse Mixed-Ownership Reform of Private Enterprises

The impact of mixed-ownership reform on zombie firms: Evidence from Chinese listed SOEs.

Clearing out zombie firms is a critical challenge for both developed and developing countries. This article draws upon data from Chinese listed SOEs to examine the impact of mixed-ownership reform on zombie firms. The findings indicate that non-state-owned shareholders participating in mixed-ownership reform by appointing directors can help reduce the possibility of SOEs becoming zombie firms, while participating in mixed-ownership reform through shareholding is not significant. Moreover, the impact of mixed-ownership reform on zombie firms is more pronounced for firms in competitive industries and firms located in the eastern region of China. Mechanism analysis reveals that the reduction of inefficient investment has a positive mediating effect between mixed-ownership reform and zombie firms.

Mixed ownership reform of state-owned enterprises and executive compensation stickiness: Evidence from China

Optimization of executive compensation incentives is an important part of the reform of state-owned enterprises, but the existence of executive compensation stickiness weakens the effect of compensation incentives. Based on data of state-owned enterprises listed on the Chinese A-shares market over the 2013–2019 period, this paper evaluates the ownership reform, or mixed ownership, of state-owned enterprises by the shareholder ratio of non-state shareholders and the appointed directors, and examines the relationship between the mixed ownership reform of state-owned enterprises and the executive compensation stickiness. The study concludes with the following findings. The shareholder ratio of non-state shareholders has no significant impact on the executive compensation stickiness, whereas directors appointed by non-state shareholders significantly reduce the executive compensation stickiness. Compared to pure central enterprises, the inhibiting effect of the mixed ownership reform on the executive compensation stickiness is more significant in local state-owned enterprises. The inhibiting effect of the mixed ownership reform on the executive compensation stickiness is more significant when managerial power is restricted or regional marketization degree is low. This paper enriches and extends extant studies on the impact of ownership reform on executive compensation incentives from the perspective of executive compensation stickiness, and provides important empirical evidence for the enhanced relationship between reforms of state-owned enterprises and executive compensation.

Effect of Appointed Directors on Corporate Carbon Emission Intensity: Evidence from Mixed-Ownership Reform in Chinese Private Industrial Enterprises

The growing prominence of global warming has led to a worldwide consensus on the need to reduce carbon emissions. Employing a sample of private industrial enterprises listed on the Chinese stock market from 2008 to 2021, this study explores the effect of directors appointed by non-controlling state shareholders (appointed directors), which is a growing type of mixed-ownership reform, on corporate carbon emission intensity. The results show that appointed directors significantly reduce corporate carbon emission intensity. Mechanism tests suggest that this reduction is achieved through developing environmental strategies and increasing executive compensation incentives. Heterogeneity analyses reveal that the effect of appointed directors is more pronounced for firms with lax regional environmental regulation, in non-heavily polluting industries, with low analyst coverage, and with poor green innovation abilities. Our findings shed light on the effectiveness of mixed-ownership reform from the perspective of appointed directors and offer new implications and evidence for environmental protection and the sustainable development of enterprises in emerging markets.

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

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.

China's mixed-ownership reform and SOE profitability

The mixed-ownership reform has been the mainstream for the SOE reform in China, but rarely is known whether this reform can improve the overall profitability of SOEs. Therefore, this paper would like to fill this literature gap by testing the impact of China's ongoing mixed-ownership reform on SOEs profitability.This reform encourages private capital to purchase shares of SOEs, so it can be regarded as a privatization plan for SOEs. Using the Difference-in-Differences (DiD) approach, we treat SOEs undergoing the reform as the treatment group and those not undergoing the reform as the control group. Our results indicate that the reform significantly increases the profitability of reformed SOEs. Mechanism analysis suggests that the reform enhances SOE profitability by reducing redundant workers, administrative fees, and related-party transactions. We also find that the effects of the reform are heterogeneous, with greater impacts observed among SOEs in unregulated industries, local SOEs, and SOEs in areas with low marketization. Overall, our research enriches the literature on privatization and mixed-ownership reform, and also provides empirical evidence to promote mixed-ownership reform.

A Study on the Impact of Mixed Reform on the Financial Performance of State-Owned Enterprises

The concept of mixed ownership reform was first put forward in the 1990s, and has been developed and strengthened year by year. Its main purpose is to stimulate the internal vitality of enterprises by introducing the combination of non-state-owned capital and state-owned capital, and optimize the management mechanism through the implementation of mixed ownership reform, so as to promote economic development and enhance the competitiveness of enterprises. This reform process not only contributes to innovation and efficiency within the company, but also lays a solid foundation for the long-term development of the company. Yunnan Baiyao Co., Ltd. is a well-known pharmaceutical enterprise, which has a significant influence and market position in the national pharmaceutical industry, and is also a key enterprise in the early adoption of mixed reform in China. Therefore, it is of great reference value and significance to analyze and study the financial performance of Yunnan Baiyao after the mixed reform. At present, the country is vigorously promoting the mixed ownership reform of state-owned enterprises. Based on this background, this paper, by analyzing the financial performance of enterprises and applying relevant theories involved, makes a detailed case analysis of the development status of Yunnan Baiyao after the mixed reform, with a view to providing some suggestions for similar enterprises or other enterprises with the intention of mixed reform.

Dilemmas and Optimisation Countermeasures of Mixed Ownership Reform of Local State-owned Enterprises

In recent years, local governments have been actively promoting the reform of mixed ownership in local state-owned enterprises. This requires seizing opportunities and taking the initiative to change, allowing state-owned enterprises that encounter difficulties in transformation and upgrading and development bottlenecks to regain vitality, achieve self-transcendence, and promote socio-economic development. This paper focuses on the reform of mixed ownership in local state-owned enterprises, analyzes the difficulties faced by the reform of mixed ownership in local state-owned enterprises, and proposes corresponding optimization strategies, with a view to providing reference for similar research.

The influence of non-state-owned shareholder governance on the governance level of state-owned enterprises--Based on the perspective of board resolution behavior and party organization governance.

With an increasing number of heterogeneous shareholders participating in corporate governance in reality, the assumption of shareholder homogeneity in agency theory is gradually relaxing in the modern field of corporate governance. The policy of mixed ownership reform in China provides empirical evidence for studying heterogeneous shareholder governance. To fully understand the governance effects of non-state shareholders, we employ the ownership proportion held by non-state shareholders among the top ten shareholders and the appointment of directors as measures for non-state shareholder governance. Using a panel fixed-effect model from the perspective of state-owned enterprises (SOEs) party organizations, we examine the impact of non-state shareholder governance on the governance level of SOEs. The study reveals that non-state shareholder governance positively affects the governance level of SOEs, with board resolutions playing a crucial role in this relationship. When party members serve as directors, the governance effect of non-state shareholders is more significant. Based on the aforementioned research findings, we recommend further refining corporate governance measures for SOEs within the context of SOE reforms. It is advisable to optimize the party organizational governance structure and leverage the synergistic effects of non-state shareholder governance and party organizational governance. Advancing reforms along the Pareto improvement path will contribute to establishing a distinctive corporate governance system for Chinese SOEs.

Research on the Influence of Strategic Adjustment on Enterprise Performance from The Perspective of Mixed Reform of State-owned Enterprises

In order to effectively solve the problems of low operation efficiency and rigid management system of state-owned enterprises, governments at all levels have actively implemented and practiced mixed ownership reform since 2016, trying to promote industrial optimization and upgrading through mixed reform and stimulate the internal development potential of state-owned enterprises. With the continuous development of the economy and society, the state adopted the three-year Action Plan for SoE Reform (2020-2022) in June 2020, giving guiding opinions and new requirements for further deepening the reform of soes. In this context, to help has not yet been mixed change of state-owned enterprises to better understand the concrete implementation process, Shanxi Fen Wine, for example, starting from the mixed change for, the enterprise mixed change in-depth after expanding brand depth, integrated marketing resources, strengthen scientific research innovation, innovation product strategy, optimize the governance structure of five strategic adjustment direction, and the strategic adjustment of influence on enterprise performance. Finally, it draws enlightenment from the three aspects of path selection of mixed reform, advantage utilization of mixed reform and control of strategic direction, which provides reference for the strategic adjustment of mixed reform of state-owned enterprises in the industry. The research found that Shanxi Fen Wine combined with the advantages of mixed reform and made strategic adjustments around the five aspects of brand, marketing, scientific research, product and governance, which had a positive and positive impact on the financial performance of enterprises.