The influence of state-owned enterprise reform on enterprise innovation: new evidence from China

ABSTRACT

The leading group of the State-owned Enterprise Reform of the State Council of China launched a three-year Double Hundred Action for state-owned enterprises in 2018. This study empirically examines the effect of the Double Hundred Action from the perspective of innovation investment using a sample of state-owned listed enterprises from 2013 to 2020. The study finds that the Double Hundred Action significantly improves the innovation investment of state-owned listed enterprises. Furthermore, our main results are more pronounced for firms with competitive industries, a low ratio of independent directors, and auditors not belonging to the ‘Big Four’. This study explores the factors influencing corporate innovation from the new perspective of the Double Hundred Action, and also enriches the study of the economic consequences of SOE reforms. This study provides empirical evidence of the positive effects of SOE reforms in emerging markets and has important policy implications for deepening the governance of SOEs.

KEYWORDS:

• Double hundred action
• innovation
• independent director
• audit quality

JEL CLASSIFICATION:

• G15
• G32
• K23

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work is supported by the Graduate Research Innovation Platform of Zhongnan University of Economics and Law [202111101].