Mixed Ownership Reform Research Articles

Mixed ownership reform and the short-term debt for long-term investment of non-state-owned enterprises: Evidence from China

In this study, we provide evidence on the effect of introducing state-owned shareholders in non-state-owned enterprises from the perspective of firms' short-term debt for long-term investment. Using Chinese Non-SOEs listed companies from 2010 to 2020 as the sample, we find that the introduction of state-owned shareholders in Non-SOEs significantly promotes the level of short-term debt for long-term investment. We also find the scale of short-term debt, the scale of long-term investment and the quality of internal control play a mediating effect in the relationship between the mixed-ownership reform and the short-term debt for long-term investment. Regional marketization level, economic downcycle, regional banks competition level, the economic policy uncertainty and the firms' market competition power can influence the effect of introducing state-owned shareholders in Non-SOEs. Further, our analysis of the economic consequences of the short-term debt for long-term investment implemented by Non-SOEs demonstrates that it indeed can reduce the cost of debt financing. Overall, the results shed light on the effectiveness of the mixed-ownership reform, and our findings enrich the literature of investment and financing strategy and provides empirical evidence to promote the mixed-ownership reform.

Greener together: The impact of China's mixed-ownership reform on firm carbon emissions

This research delves into the impact of mixed-ownership reform on carbon dioxide emissions within State-Owned Enterprises (SOEs), leveraging Propensity Score Matching (PSM) and Difference-in-Difference (DID) estimation methodologies. The results gleaned from our study evince that the adoption of mixed-ownership reform in China's SOEs facilitates a notable reduction in carbon emissions. Our mechanism analysis elucidates that the substitution of clean energy plays a significant role in enabling mixed-ownership reform to foster corporate carbon emission reduction. Intriguingly, our evidence reveals that the influence of mixed-ownership reform is more pronounced in curtailing carbon emissions of large-scale enterprises. Conversely, this reform appears less effective in constraining the augmentation of carbon emissions in small and medium-sized enterprises. The robustness of our findings is further buttressed by the application of alternative matching methods and results derived from the placebo test.

Mixed Ownership Reform and Environmental Sustainable Development—Based on the Perspective of Carbon Performance

Mixed ownership reform has contributed greatly to China’s economic development; however, there is little literature on how mixed ownership reform affects carbon performance in the context of environmentally sustainable development. Therefore, this paper takes A-share industrial state-owned enterprises in Shanghai and Shenzhen from 2008 to 2020 as research samples to investigate the impact of mixed ownership reform on carbon performance through empirical tests. The results show that the mixed ownership reform of state-owned enterprises can improve the carbon performance of enterprises. The intermediary test shows that green innovation plays an intermediary role in the relationship between mixed ownership reform and carbon performance. Furthermore, compared with green management innovation, mixed ownership reform has a stronger promoting effect on green technology innovation, and green technology innovation has a greater impact on carbon performance. Heterogeneity analysis shows that in heavily polluted industries and competitive industries, mixed ownership reform of state-owned enterprises has a more significant role in improving carbon performance. Therefore, the mixed ownership reform of state-owned enterprises is of great significance for promoting environmental sustainable development. Overall, this study provides empirical evidence for the environmental sustainable development of state-owned enterprises in emerging markets.

Mixed blessing: Mixed ownership reform and innovation behaviour of Chinese state-owned enterprises

We focus on China's extensive mixed ownership reform (MOR) and find that MOR significantly improves the innovation scale but reduces the collaborative innovation depth of SOEs. Additional research finds that this effect is primarily related to the widening of the internal salary gap and the reduction in the policy burden. An increase in the scale of innovation can enhance a company's intrinsic value; however, a decline in the depth of collaborative innovation has a negative impact on the intrinsic value.

The Halo Effect of Government: Does State-Owned Capital Promote the Green Innovation of Chinese Private Enterprises?

To achieve carbon neutrality, China is working toward a green transition where a key focus is to promote green innovation among privately-owned enterprises (POEs). Reverse mixed ownership reform, represented by the participation of state-owned capital, is a major direction in the current reform of Chinese state-owned enterprises (SOEs). Nevertheless, few studies have thoroughly investigated the impact of state-owned capital participation on green innovation in POEs. Thus, this research aims to analyze how state-owned capital influences POEs’ green innovations. Using an unbalanced panel dataset of 12,206 firm-year observations of Chinese listed companies from 2011 to 2019, we employ the fixed-effect ordinary least square (FE-OLS) as an effective estimation method to control unobserved individual heterogeneity and potential endogeneity. The results show that state-owned capital can significantly promote POEs’ green innovation. Mechanistic analyses suggest that state capital eases financial constraints and attracts more creative talent to work for the private sector, thus promoting green innovation. In addition, our baseline findings are more salient for enterprises with political connections, those operating in heavily polluting industries, and those located in areas with more stringent intellectual property rights (IPR) legislation. Finally, these findings are confirmed significant, even with endogeneity concerns and robustness checks being considered. The contribution of this research outlines the key role of state-owned capital in alleviating financial constraints and attracting talent to promote POEs’ green innovation.

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

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.

Firm's perception of economic policy uncertainty and corporate innovation efficiency

Current Economic Policy Uncertainty (EPU) indicators are highly correlated with macroeconomic growth. To better reveal the EPU perceived by each firm, a firm-level EPU index is constructed using a text mining method. Using data of Chinese A-share listed companies from 2011 to 2020, this study examines the impact of a firm's perception of EPU on corporate innovation efficiency, computed using Stochastic Frontier Analysis (SFA) with a time-varying decay model. The empirical results show that corporate innovation efficiency decreases with a firm's perception of EPU. Additionally, the impact of traditional EPU indicators on innovation efficiency becomes statistically insignificant after the macroeconomic variable is added, demonstrating the importance of introducing firm-specific perceptions of EPU. Moreover, this negative impact is attenuated for firms with higher board independence and lower board ownership, while State-Owned Enterprises (SOEs) are less impacted. Furthermore, the impact of a firm's perception of EPU on corporate innovation efficiency is more pronounced for high-tech firms and those without political connections. We propose the following policy implications: First, it is vital for governments to provide stable economic circumstances to maintain corporate innovation efficiency. Second, mixed ownership reform is crucial in China; the risk-taking of non-state-owned firms will be greatly improved; thus, the innovation efficiency of non-state-owned firms will improve.

Mixed-ownership reform and strategic choice of Chinese state-owned enterprises.

The strategic choice of state-owned enterprises (SOEs) is crucial to the sustainable development of China's economy. This paper explores the impact of mixed-ownership reform on the strategic choice of SOEs from the shareholder power and the board power. We find that the greater the diversity of mixed shareholders, the depth of mixed equity, the control of mixed equity, and the excess control of mixed equity, the higher the degree of mixed-ownership reform, and the more likely it is to promote SOEs to choose the prospector strategy. The mechanism test states that the impact of mixed-ownership reform on enterprise strategy is achieved through the balance effect between non-state-owned shareholders and state-owned controlling shareholders with the same power, and the synergy effect between different powers of non-state shareholders. Further research indicates that the mixed-ownership reform has a stronger driving effect on the prospector strategy in SOEs under strict external supervision, competitive industries, and local areas. This study clarifies the governance logic of non-state-owned shareholders on the strategic positioning of SOEs by dual control rights, and it provides empirical evidence for the formulation of enterprises' market-oriented strategic objectives.

Analysis of China Unicom Corporate Governance Problems and Solutions

Tian Guoqiang, an economist, pointed out that "the mixed ownership economy with cross-shareholding and mutual integration of state-owned capital, collective capital and private capital is an important form of realizing the basic economic system. “The implementation of mixed ownership is conducive to expanding the functions of state-owned capital, maintaining and increasing its value, improving its competitiveness, and helping all kinds of ownership capital learn from each other, promote each other and develop together (Tian, 2005). This shows that China has taken a big step in the reform of mixed ownership with mixed ownership enterprises as the main body. In enterprise management, corporate governance determines the long-term development plan and strategic direction of enterprises. Therefore, the reform of corporate governance structure of mixed ownership enterprises is of great significance to deepen the reform of mixed ownership and the related development of China's economic field (Tian, 2005).The purpose of this paper is to explore the establishment of corporate governance framework of mixed ownership enterprises under China's national conditions, analyze the existing problems of China Unicom, such as the imperfect structure of the board of directors and the loopholes in the professional manager system, and put forward solutions such as optimizing the structure of the board of directors, strengthening the construction of managers, and establishing equity incentive mechanism, so as to improve the corporate governance structure of China Unicom. And provide solutions and experience for the follow-up development of China's state-owned enterprises.

ASSOCIATION BETWEEN STATE OWNERSHIP PARTICIPATION AND RENT-SEEKING BEHAVIOR OF PRIVATE FIRMS IN CHINA

The rent-seeking behavior of firms in economic society destroys the fair market order and hinders the sustainable development of the economy. In the context of the mixed-ownership reform, this study examines whether and how state ownership participation affects the rent-seeking behavior of private firms using Chinese-listed private firms from 2010 to 2019. The findings suggest that state ownership participation significantly eliminates the rent-seeking behavior of private firms. However, the eliminating effect of state ownership participation on private firms’ rent-seeking behavior is weakened by high economic policy uncertainty and government intervention where private firms operate. The findings of this study enrich the characteristics and influencing factors of rent-seeking behavior of private firms, expand the literature on Chinese mixed-ownership participation, provide empirical evidence that is inconsistent with Western theoretical predictions, construct a new theory based on practices with Chinese characteristics and further reveal the characteristics of Chinese accounting practices.

Promote or inhibit: State-owned equity participation and family firms’ innovation investment

Targeting A-share listed family firms on the Shanghai and Shenzhen Stock Exchange, this study focuses on the special situation of state-owned equity participation in non-state-owned enterprises. Specifically, we explore the relationship between state-owned equity participation, intergenerational succession in family firms, and innovation investments. The results reveal a prominent “double-edged sword” effect of state-owned equity participation on family firms; that is, there is a reversed U-shaped relationship between shareholding proportion and innovation investment. To some extent, the intergenerational succession of family firms moderates the reversed U-shaped relationship. Moreover, the double-edged sword effect of state-owned equity is more prominent in family businesses that are created by the entrepreneur from scratch. Compared to existing research arguing for the linear relationship between state-owned equity participation and innovation investment by enterprises, we reveal the impact of the excessive supervision effect arising from the increase in state-owned equity holdings on family firms’ innovation. This study confirms the double-edged sword effect of state-owned equity participation in family firms and further explores the influence of intergenerational succession and the heterogeneity of family firms on such an effect. By revealing the double-edged sword effect of state-owned equity holdings, this study enriches the research on the participation of private enterprises in mixed-ownership reform.

Association between state ownership participation and the performance of private firms: Evidence from China

AbstractThe mixed ownership reform aims to improve the performance of firms, which is important for optimizing the overall economic layout and promoting firms to sustainable development. Therefore, an important issue is whether state ownership participation in private firms improves their performance in the context of the mixed ownership reform. This study investigates whether and how state ownership participation affects the performance of private firms using Chinese listed private firms from 2010 to 2020. The results of this study indicate that state ownership participation significantly eliminates the performance of private firms. Further results show that there is a U‐shaped relationship between the mixed ownership model and the performance of private firms. At the same time, firm transparency and financing constraints play a negative moderating role in the relationship between the mixed ownership model and the performance of private firms. The findings of this study enrich the literature on factors influencing the performance of private firms, provide empirical evidence for mixed ownership reforms in China, and further reveal the characteristics of Chinese accounting practices and the logical rules behind the operation of these practices.

Research on the Impact of Mixed Reform of State-Owned Enterprises on Enterprise Performance—Based on PSM-DID Method

Based on the data of China Industrial Enterprise Database, this paper uses the propensity score matching double difference method (PSM-DID) to study the impact of mixed ownership reform of state-owned enterprises on enterprise performance. The study found that mixed ownership reform of state-owned enterprises can enhance the performance of enterprises. Further considering marketization, industry competition and regional characteristics, it is found that the effect of reform is heterogeneous. When the degree of marketization is high, the effect of reform on improving productivity is good, and when the degree of marketization is low, the effect of reform on reducing debt is good; the reform effect of industries with low degree of competition is better than that of industries with high degree of competition. The reform of state-owned enterprises in the eastern region has the best effect, and the reform in the central region has a better effect on reducing debt. The effect of mixed ownership reform in the western region is not significant.

Do state-owned participation shareholders improve the environmental governance level of private enterprises? Evidence from Chinese listed firms

In recent years, whether the mixed-ownership reform system of introducing state-owned participation shareholders into private enterprises helps to improve the environmental governance of private enterprises has been a matter of much attention and discussion. Based on data from 2007 to 2019 for Chinese A-share privately listed companies, this paper examines how the state-owned participation shareholders affect the environmental governance level of private enterprises. The results show that state-owned participating shareholder participation can improve the environmental governance level of private enterprises, and this phenomenon is more significant among industrial enterprises and enterprises in regions with a higher degree of marketization. Furthermore, there is a substitution effect between the state-owned participation shareholders, the executive team’s participation in politics, and the Party organization establishment in improving the environmental governance level of private enterprises, and the state-owned participation shareholders play a relatively larger role. In addition, the supervision effect is better when state-owned participation shareholders are from the local area and have a higher level of participation.

Productivity Improvement from the Mixed-Ownership Reform: A Financial Frictions Perspective

How to raise productivity level has become the core issue of ensuring China’s sustained Economic Growth in the Future. The mixed-ownership has both the financing advantage of the SOEs and the competitive ability of the Private firms, which can improve the governance of the firms. This paper builds a model based on the financial frictions literature, and studies the process of the mixed-ownership reform. The main results include: 1. On average, the mixed-ownership reform enhances the performance of the firms; 2. The relationship between the share of state ownership—full privatization, state-ownership, or mixed-ownership—and the performance depends on both the productivity and the restriction of financing; 3. When production efficiency is low, privatization works best; when production efficiency is medium, partial privatization works best; when production efficiency is high, nationalization works best; 4. Our model explain the puzzle of state-owned equity ratio and performance.

China’s Mixed-Ownership Reform and SOE Profitability

China’s Mixed-Ownership Reform and SOE Profitability

Retracted: The Impact of Mixed-Ownership Reform on Innovation Performance of Manufacturing Companies: Evidence from China.

[This retracts the article DOI: 10.1155/2022/3809829.].

How much state ownership is more conducive to corporate innovation in firms? Evidence from China

ABSTRACT Using 2009 to 2020 data for Chinese A-share listed firms in Shanghai and Shenzhen, we examine how much state ownership in firms is most conducive to improving corporate innovation quantity and quality. Our results are as follows: First, state ownership enhances corporate innovation by alleviating financing constraints (resource availability) but inhibits corporate innovation by weakening risk-taking (innovation willingness) and increasing agency costs (resource efficiency), leading to an inverted U-shaped relationship between state ownership and corporate innovation. Second, the percentage of state ownership that maximises innovation quality differs from that of maximising innovation quantity. State-owned enterprises (SOEs) can choose an appropriate state-ownership structure according to the actual situation in the mixed-ownership reform process. Third, non-state-owned shareholders’ control right negatively moderates the inverted U-shaped relationship between state ownership and innovation quantity but do not significantly moderate the inverted U-shaped relationship between state ownership and innovation quality. Fourth, foreign direct investment (FDI) negatively moderates the inverted U-shaped relationship between state ownership and innovation quantity and quality. Our findings reveal the impact of state ownership on corporate innovation and its transmission path, providing empirical evidence for optimising the ownership structure based on a corporate innovation perspective in the process of SOE mixed-ownership reform.

Impact of mixed ownership reforms on firm innovation–empirical evidence from China

ABSTRACT Based on data from Chinese A-share listed companies from 2008–2018, an investigation is carried out upon the impact of mixed ownership reforms and relative control transfers on corporate innovation before and after the occurrence of mixed ownership reforms, and relative control transfers in state-owned and private enterprises, as well as their mechanisms of action. A double-difference propensity score matching method is adopted. It has been found that mixed ownership reforms are more likely to promote innovation in SOEs, particularly in monopolistic industries. A further sub-sample test reveals that in state-owned enterprises in monopolistic industries, the acquisition of relative control by private shares can amplify the innovation effect of mixed ownership reforms. In private companies in competitive industries, state-owned shares can only fuel innovation if they gain relative control. Reducing agency costs and easing financing constraints are important channels for mixed ownership reform to promote corporate innovation.

Research on the Effectiveness of Deep Learning−Based Agency Cost Suppression Strategy: A Case Study of State−Owned Enterprises in Mainland China

The mixed ownership reform aims to improve the property rights structure of the state−owned enterprises (SOEs) and reduce agency costs, and the current mixed reform strategies mainly include equity blending by introducing external non−state capital, executive assignments, and employee stock ownership. In this paper, 953 valid data of A−shares listed in Shanghai and Shenzhen from 2008 to 2020 are used as samples to construct the indicators of mixed reform strategy by the literature statistics method. After obtaining multiple impact indicators, the regression impact model of corporate agency cost suppression strategy is constructed by MATLAB software using a machine learning algorithm. On this basis, the performance of multiple machine learning algorithms is compared, and it is found that the integrated optimization−based bag−boosting model is used to study the effect of hybrid reform strategy to reduce the agency costs of SOEs, and the proportional setting of indicators when the effect is optimal is also explored. Finally, the laws of different influencing factors on the agency costs of enterprises are explored separately by the eigenvalue method. The results of the study show that the proportion of shareholding of the first largest non−state shareholder is sin−functional with the agency costs of SOEs when non−state majority shareholders are introduced into SOEs’ equity mix, and the agency costs tend to decrease after SOEs become privately held enterprises. The greater the number and proportion of supervisors appointed by non−state shareholders, the greater the supervisory restraint effect on SOE managers and the better the effect of suppressing agency costs. The participation of non−state−owned shareholders in the company’s business decisions by appointed executives and the special resource advantages of SOEs intensify the occurrence of the self−interest of appointed executives and the increase of agency costs of SOEs. The implementation of an employee stock ownership plan plays the role of employee supervision and restraint on SOE managers, which reduces the agency costs of SOEs. Based on this, it can provide support for the government to improve the hybrid reform policy and promote the process layer by layer, and also provide theoretical reference for SOEs to deepen the equity mix, incentivize employee shareholding, and empower non−state shareholders to govern and thus reduce agency costs.