Can private enterprises improve their investment efficiency by participating in the mixed-ownership reform of state-owned enterprises? Evidence from China

Optimizing investment structure and improving investment efficiency are vital for the development of private enterprises. Using data on China's A-share private listed companies between 2003 and 2020, we empirically test the impact of participating in the mixed-ownership reform of state-owned enterprises on private enterprises' investment efficiency. We find that such participation improves private enterprises' investment efficiency. Mechanism analysis reveals that reducing information asymmetry and easing financing constraints are the main channels for this improvement, showing an 'information effect' and a 'resource effect'. This article provides empirical evidence from Chinese listed companies for the relationship between the mixed-ownership reform of state-owned enterprises and private enterprises' investment efficiency.