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State ownership and innovations: Lessons from the mixed-ownership reforms of China's listed companies

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  • Lo, Dic
  • Gao, Ling
  • Lin, Yuchen
Abstract
Mixed-ownership reforms have been the mainstay of reforming China's state-owned enterprises (SOEs) in recent years. In relation to the broader context of the continuous slowdown in economic growth under the New Normal, the reshaping of the innovative capacity of SOEs has been widely considered to be of systemic importance. Yet, in the relevant literature, the effects of mixed-ownership reforms on innovations have remained unclear. This paper seeks to contribute to the literature by means of studying such effects for China's listed companies in the period 2007–2018, from the theoretical perspective of organizational controls in innovative firms. Our study finds that SOEs tend to be more innovative than non-SOEs, and increases in state shareholding do raise the innovative capacity of mixed-ownership enterprises. Further analyses reveal that, for mixed-ownership enterprises, the lower the level of state shareholding the more reliance of innovations on the capability of organizational controls in corporate governance. These findings offer useful policy lessons for China. Additionally, we discuss the contribution of our study to the broader literature at a conceptual level, with an emphasis on the novelty of highlighting the importance of organizational controls in the reform of SOEs.

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  • Lo, Dic & Gao, Ling & Lin, Yuchen, 2022. "State ownership and innovations: Lessons from the mixed-ownership reforms of China's listed companies," Structural Change and Economic Dynamics, Elsevier, vol. 60(C), pages 302-314.
    • Handle: RePEc:eee:streco:v:60:y:2022:i:c:p:302-314
    DOI: 10.1016/j.strueco.2021.12.002
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    More about this item

    Keywords

    State-owned enterprises; Mixed ownership; Organizational controls; Innovations;
    All these keywords.

    JEL classification:

    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • P31 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions

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