Research on the Impact of State-owned Enterprise Privatization Reform on Firm Innovation

Abstract

Over the past few decades of state-owned enterprise (SOE) privatization in China, though many studies have been done concerning different aspects of relationship between the privatization of SOE and firm development, little was known about the impact of state-owned enterprise privatization reform on firm innovation. Some of the prior literature didn’t manage to provide a convincing result to a certain extent as the data the chose was not enough. This article utilizes a substantial dataset of more than 28,000 listed companies that have undergone privatization, extracting the R&D expenditure data of listed companies from Wind database spanning from 2010 to 2022. After systematic investigation of the impact of SOE privatization (as measured by a dummy variable) on innovation (as measured by R&D investment) using the model of regression, it can be found that the privatization of state-owned enterprises in my country has had a negative impact on corporate innovation, as certain preconditions are needed for the success of privatization and restructuring, which plays a vital role in avoiding certain risks after privatization.