The Impact of Mixed Ownership Reform on the Investment Efficiency of State-Owned Enterprises in China

Transitioning into a new phase of blending various mechanisms, does the incorporation of shareholders not owned by the state in governance facilitate the integration of these mechanisms and improve the investment efficacy of Chinese state-owned enterprises? The empirical findings of this study, which examines the involvement of non-state shareholders in governance of China's A-share listed state-owned firms from 2008 to 2022, demonstrate that these shareholders have a considerable effect on improving the investment efficiency of state-owned enterprises and reducing overinvestment. The impact of non-state shareholders with superior governance is far more pronounced than those without such high-level governance. By examining the influence mechanism, it has been discovered that the dynamic capabilities of invention and change, coordination and integration, and learning and absorption partially mediate their relationship. An examination of the data reveals that, as the level of strategic radicalization of companies rises, the participation of non-state-owned shareholders in governance diminishes the beneficial effect on the investment effectiveness of state-run enterprises. These discoveries are of great importance for the apportionment of control rights and the formation of strategies by non-state-owned shareholders in China's mixed reform.