State-Owned Directors and Executives' Participation in Governance and Innovation Performance of Non-State-Owned Enterprises: A Study Based on Reverse Mixed-Ownership Reform

This paper examines the impact mechanism of State-Owned Directors and Executives' Participation in Governance (SODEPG) on the innovation performance of Non-State-Owned Enterprises (NSOEs). The study finds that SODEPG is associated with enhanced innovation performance of NSOEs, particularly promoting substantive innovation. The conclusion remains valid after robustness checks. Mechanism analysis indicates that SODEPG may improve NSOEs' innovation performance by alleviating agency problems, increasing information transparency, easing financing constraints, and enhancing risk-bearing capacity. Further analysis suggests that the positive impact of SODEPG on NSOEs' innovation performance is more pronounced in growth and maturity stages of smaller-sized firms, high-tech enterprises, and those with richer relational capital of State-Owned Directors and Executives (SODEs). This paper explores the governance effects of SODEs within the context of reverse mixed-ownership reform, contributing to the study of the relationship between government institutions and market dynamics.