Mixed‐Ownership Reform and Unproductive Expenditures: Evidence From China

Using a dataset of listed firms on the Shanghai and Shenzhen Stock Exchanges in China, we find that mixed‐ownership reform (the Reform) can reduce unproductive expenditures in both state‐owned enterprises (SOEs) and non‐state‐owned enterprises (non‐SOEs). However, the underlying mechanisms differ. The governance effect dominates in SOEs, whereas the resource effect dominates in non‐SOEs. Further tests reveal that shareholder type and the appointment of directors, supervisors, and senior executives affect these effects. In addition, the interaction effect of the Reform and unproductive expenditures helps reduce the policy burdens of SOEs and increases the donations of non‐SOEs. Our findings remain robust after various tests. Our research has significant implications for advancing mixed‐ownership reform and enhancing market efficiency.