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Policy burden and technological innovation of state-owned enterprises

Finance Research Letters, ISSN: 1544-6123, Vol: 70, Page: 106312
2024
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Article Description

State-owned enterprises (SOEs) possess unique characteristics and play pivotal roles within the economy, necessitating them to bear significant policy burdens. Based on China's A-share listed firms from 2008 to 2021, we empirically analyzed how the policy burden influences SOEs’ capacity for technological innovation. Unlike conventional views, we found that the policy burden significantly improves SOEs’ innovation capability, and this conclusion holds true even after multiple robustness tests. Mechanism research shows that government subsidies and positive media coverage are the transmission pathways for policy burdens to promote innovation in SOEs. Further research revealed that the policy burden is more important in promoting innovative advancement in central and competitive SOEs. Our conclusion confirms the positive aspects of the policy burden and contributes to research on the innovative effects of the policy burden on SOEs.

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