Does the Mixed-Ownership Reform Affect the Innovation Strategy Choices of Chinese State-Owned Enterprises?

Abstract

In recent years, the innovation of state-owned listed enterprises has gained substantial momentum in academic research due to their vital role in sustainable economic development. This article examines and evaluates the influence of mixed-ownership reform on the innovation strategy of Chinese State-Owned Enterprises (SOEs) from the two dimensions of ownership structure adjustment and control right allocation. We extend extant research in that: The diversity of mixed shareholders, the depth of mixed equity, and the control of mixed equity can significantly promote the exploratory innovation investment of SOEs. Our study investigates the impact of the shareholding ratio of foreign investors, natural persons, and institutional investors. The empirical results found a significant positive correlation between the increase of the shareholding ratio of institutional investors and the exploratory and exploitative innovation investment. On the other hand, private shareholders’ shareholding ratio has no impact on the innovation strategy choices of SOEs. Specifically, the results proved that the promotion of exploratory innovation investment by mixed-ownership reform is more significant in SOEs controlled by the central government or in competitive industries. To a large extent, this promotion is achieved by improving the proportion of executives with a professional R&D background in SOEs.

Firm information disclosure environment and R&D investment: Evidence from Internet penetration

“…By following the common practices of the existing literature and the intensity of innovation investment R&D is used to proxy innovation motivation [ 27 – 29 ]. R&D is specifically defined as the ratio of the company’s annual R&D expenditure to the total assets at the beginning of the year [ 27 , 30 – 32 ].…”

The effect of ownership on sustainable development and environmental policy in urban waste management: An explicatory empirical analysis of Italian municipal corporations

“…Privatization may in fact allow the adoption of a more aggressive and stimulating structure of incentives for managers (Hart, Shleifer, & Vishny, 1997). Private shareholders can bring a more mature management experience and technical know‐how to the company, support the entrepreneurship of executives, provide more opportunities for market competition, and improve the operating efficiency and sustainability of MOCs (Li, Yuan, Khan, Pervaiz, & Sun, 2020). Private firms may exploit scale economies through the coverage of several territorial jurisdictions.…”

“…The majority of studies argue that the private sector is more efficient than the public one, apart from the existence of some incentive losses over time (Dijkgraaf & Gradus, 2007; Szymanski & Wilkins, 1993), a small number of studies found public waste utility companies being more efficient than private ones, whereas a good number of them did not find any significant differences. As there is growing trend towards the adoption of private management techniques in such companies, the public versus private management issue has become a highly relevant topic in literature (Bel, Hebdon, & Warner, 2007; Bel & Warner, 2015; Li et al, 2020). Many studies have been carried out, often associated with divergent conclusions depending on the sample and on the technique chosen.…”

“…Both public and private entities can invest in MOCs, so they can be described as mixed companies (Hodge & Greve, 2007) incorporating features of both the public and private sector (Musacchio & Lazzarini, 2014). Although municipal shareholders put for example more emphasis on policy‐related tasks, on maintaining social security, reducing unemployment rates, and keeping control of sensitive industries (Wang, Jiao, Xu, & Yang, 2018), private ones pay more attention to their own interests and tend to prefer inputs that can bring higher returns (Li et al, 2020). MOCs can be owned by multiple municipalities or shared by the public and private sectors despite the existence of local bureaucracies (Cruz & Marques, 2013), this way generating advantages and synergies arising from the interaction among different public and public–private elements (Bovaird, 2004).…”

RD internationalization, domestic technology alliance, and innovation in emerging market

“…In recent years, as the world’s largest emerging economy and the leading destination of foreign direct investment [ 42 ], China is in an emerging economy with the most rapid economic and technological development, and plays an important role in the international strategies of many multi-national corporations [ 43 – 45 ], so we select Chinese listed companies as our empirical database, we collect the information of 185 companies during the year 2012 to 2017 as our dataset, we chose this sample as empirical dataset because these enterprises have fewer missing values in the selected years, and they also have more overseas R&D activities and domestic R&D activities, the selection of these enterprises can maintain the integrity and authenticity of our data and maximize the sample size. Specifically, this is the final sample that we had passed through layers of criteria and screening in the database.…”