Mixed-ownership reform and green innovation: based on the perspectives of capital effect and governance effect

Green innovation can achieve a win–win situation of economic growth and environmental protection. This paper examines whether and how mixed ownership reform affects green innovation in state-owned enterprises (SOEs). Our findings show that mixed ownership reform can significantly stimulate green innovation in SOEs. The baseline results continue to hold after a series of robustness checks. We also present two underlying mechanisms of this interplay: mitigating financing constraints by introducing capital from non-state shareholders, namely, capital effect, and reducing agency conflicts by allowing non-state shareholders for executive appointment, namely, governance effect. Further analyses show that mixed ownership reform leads to an increase in both green innovation quantity and quality. This stimulating effect is more pronounced for enterprises in heavy-polluting and high-tech industries. This paper provides a comprehensive framework that integrates the resource-based view with agency theory and casts new light on how to stimulate green innovation in SOEs by highlighting the role of ownership structure.