State-Owned Capital Participation in Private Enterprises: A Perspective of Debt Financing

This study takes debt financing as the entry point and explores the impact of state-owned capital participation in private enterprises from the perspectives of “unarticulated rules” and “articulated rules”. The study finds that state-owned capital participation significantly reduces the debt financing costs of private enterprises and expands the scale of their debt financing. This conclusion remains valid after a series of endogeneity and robustness tests. Further analysis of the mechanism reveals that stateowned capital participation improves the debt financing of private enterprises through multiple channels: Enhancing their social reputation, mitigating the “statistical bias” they face, optimizing their information quality, and reducing the “shareholder-creditor” agency problems. This paper conceptualizes these benefits as the “complementary advantages of heterogeneous shareholders”. This not only constructs a theoretical framework for “reverse mixed-ownership reform” but also better narrates the Chinese story of “mixed-ownership reform” by adopting a more universally applicable theory of equity structure. Additionally,the paper supplements existing research on the macro-and meso-level relationship between the government and the market by exploring the government’s positive role at the microlevel.