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Heterogeneous Blockholders and Enterprise Innovation: Evidence From the Mixed-Ownership Reform in China

Author

Listed:
  • Hui Xia
  • Shixian Ling
  • Zhangxin (Frank) Liu

Abstract

The mixed ownership reform of China is a kind of further partial privatization for the listed state-owned enterprises (SOEs), and an opportunity for non-state-owned enterprises (non-SOEs) to expand their commerce boundaries. The purpose of this paper is to investigate the effect of heterogeneous blockholders on corporate innovation. Spanning the analysis with listed companies in China from 2007 to 2017, we find that heterogeneous blockholders have a significant positive effect on enterprise innovation. Lowering agency costs and improving corporate innovation efficiency are the two plausible mechanisms. From further research, we find that compared with non-SOEs, the positive effect of heterogeneous blockholders on enterprise innovation is more pronounced for SOEs, and the effect is more positive with the improvement of relative power balance between heterogeneous blockholders. The paper sheds light on the innovation effects of mixed-ownership reform in emerging and transitioning countries. JEL Classification : G32, M13, D23, G34

Suggested Citation

  • Hui Xia & Shixian Ling & Zhangxin (Frank) Liu, 2023. "Heterogeneous Blockholders and Enterprise Innovation: Evidence From the Mixed-Ownership Reform in China," SAGE Open, , vol. 13(4), pages 21582440231, November.
    • Handle: RePEc:sae:sagope:v:13:y:2023:i:4:p:21582440231207461
    DOI: 10.1177/21582440231207461
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    More about this item

    Keywords

    mixed ownership reform; equity structure; heterogeneous blockholders; enterprise innovation; Corporate governance;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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