Mixed Ownership Reform of State-Owned Enterprises and R&D Investment

Abstract

State-owned enterprise (SOE) reforms may play a vital role in R&D investment. This paper investigates the impact of mixed ownership reform of SOEs in China on R&D investment. Using a large sample of Chinese SOEs for the 2009–2018 period, we find that the reform has a positive effect on R&D investment. The result is robust to a battery of robustness tests and more prominent for firms with non-state-owned large shareholders holding more shares relative to state-owned large shareholders, and for firms with less stress from local officials pursuing political promotion. Furthermore, we find that to compensate for the adverse impact of R&D on the political promotion of the CEO, non-state-owned large shareholders allow the CEO to increase perk consumption. Our study suggests that the ongoing mixed ownership reform in China improves the SOEs’ efficiency.

Retesting the Innovation Motivation Effect of the Low-Carbon City Pilot Policy in China: Evidence from Supply Chains

“…We assess the investment level of suppliers' innovative activities by calculating the proportion of gross expenditure on research and development as a percentage of operating revenue [30,42,43].…”