Does the mixed‐ownership reform improve the productivity of state‐owned enterprises? Evidence from companies listed in Chinese stock

Abstract

The Chinese government initiated a new round of state‐owned enterprise (SOE) reform in 2015 to improve SOE's performance with a focus on introducing multiple ownership shareholders and strategic partners, known as the mixed‐ownership reform (MOR). This paper examines the policy effectiveness of the current MOR, an ongoing quasi‐experiment, for listed SOEs’ productivity from 2011 to 2019 using a time‐varying difference‐in‐difference (DID) approach. Overall, the total factor productivity (TFP) of SOEs selected as pilots by the government improved significantly by 14.57% after the reform compared to other SOEs, providing evidence for the positive role of the current MOR. This positive impact is prolonged and tends to increase in the post‐reform years. A series of robustness checks show that our empirical specification satisfies the basic assumptions of DID and our findings are robust. By comparing the two reform strategies in the MOR, we find that the restructuring and reorganization plan is the primary channel driving TFP growth, showing a 0.4% improvement after the reform, rather than the employee stock ownership plan. We also investigate the impact of MOR on other financial and non‐financial indicators, but we only find a significant increase in the profitability of SOEs’ assets.

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

“…The entry of private shareholders into SOEs is given much importance in the literature. Private capital has the advantage of being highly efficient, which not only helps SOEs with their internal governance issues but also greatly increases their productivity and innovation efficiency [2,30,31]. However, the process of state capital participation in POEs has received little attention.…”

“…Management [12,14,15,17,[25][26][27]29] Economic [10,16,18,19,21,22,31] Business [2,4,6,20,23,24,28,30] Hypothesis development Management [32][33][34][35][36] Economic [28,[37][38][39][40][41][42][43][44][45][46][47][48][49][50] Business [13,[51][52][53][54][55][56][57]…”