Comparison Of The Motivations And Economic Consequences Of Local State-owned Enterprises Investing In Local Private Enterprises And Those Of Other Places

Since the third plenary session of the 18 th CPC Central Committee proposed the development of mixed ownership economy,the national reform and opening up has continued to deepen,various mixed reform policies have been gradually implemented,and the ways of mixed reform have also been constantly innovated.The cases of private enterprises introducing state-owned capital to carry out mixed ownership reform are increasing.The introduction of private capital by state-owned enterprises to carry out mixed ownership reform has been the mainstream trend of mixed ownership reform.However,in recent years,a large number of state-owned assets have injected capital into private enterprises,setting off the climax of "reverse mixed reform",in which the capital-intensive industries such as environmental protection,machinery,finance,medicine,integrated circuits and so on are the key targets pursued by state-owned assets.Then came the constant questioning voice of "national advancement and private retreat","anti-marketization" and so on.To correctly evaluate and treat "reverse mixed reform",we need to start from reality and understand the underlying causes and economic consequences.However,at present,relevant research needs to be supplemented,especially for the selection of objects when state-owned enterprises participate in equity.This paper studies the internal driving force and economic consequences of local state-owned enterprises’ equity participation in local private enterprises and non-local private enterprises based on the regional differences of local state-owned enterprises’ equity participation objects,and complements and improves the relevant research on the motivation and economic consequences of mixed ownership reform.It is found that for local and non-local private enterprises,local state-owned enterprises will have different purposes of equity participation,and then take different investment strategies.When local state-owned enterprises participate in local private enterprises,the internal driving force is the political goal,while when participating in non-local private enterprises,local state-owned enterprises pursue the maximization of short-term profits.Because the pressure of local state-owned enterprises on resources and achievements is relatively strong,local state-owned enterprises are more inclined to transfer resources to local private enterprises,and have a higher degree of participation in the operation and management of local private enterprises,which is conducive to achieving political goals.For non-local private enterprises,due to the restriction of the inherent attribute of geography,local state-owned enterprises naturally give up the motivation of achieving political goals and are more inclined to participate in non-local private enterprises for the economic benefits of investment.This internal goal difference makes the local state-owned enterprises have obvious externalization in the characteristics of equity participation when they participate in the two kinds of enterprises.The local state-owned enterprises’ equity participation in local private enterprises shows a longer investment period,a higher shareholding ratio,and a gradually increasing investment share;However,when participating in non-local private enterprises,it shows relatively short investment cycle,low shareholding ratio and gradually reduced investment share.In addition,local state-owned enterprises will participate in the governance of local private enterprises by providing financing channels and services,transferring senior executives,introducing professional strategic partners,etc.,but this resource-based assistance may not improve the operation and management of private enterprises.On the contrary,it may lead to the radical expansion of private enterprises and neglect the management of asset operation efficiency.However,non-local equity participation is triggered by the mutual matching of capital demand and supply,which is a benign "mixed capital" that realizes the effective allocation of resourcesThrough the case study of Qingdao City Construction Investment(Group)Co.,Ltd.’s participation in Titan Wind Energy(Suzhou)Co.,Ltd and Qingdao Zhongzi Zhongcheng(Group)Co.,Ltd,this paper clarifies the differences and economic consequences of local state-owned enterprises’ equity participation motivations,provides empirical reference for enterprises trying to carry out reverse mixed reform,helps to understand the reasons behind state-owned enterprises’ equity participation in private enterprises,and emphasizes the necessity of rationally evaluating the potential contribution of the introduction of shares to the development of enterprises when introducing new shareholders of different forms of ownership.