Abstract:

Using data from A-share nonfinancial listed companies that were privately controlled at the time of IPO, this paper explores the impact of "reverse mixed reform" on two types of agency problems in private enterprises. The results show that state-owned capital can significantly reduce type II agency costs, but the authors find no evidence supporting the negative effect of state-owned capital on type I agency costs. There is weak evidence suggesting that “reverse mixed-owner- ship reform" will aggravate type I agency problems. The results of heterogeneity tests show that the negative effect of "re- verse mixed-ownership reform" on type II agency costs only exists when the external governance and regional institutional environment are poor, and that the effect is not significant in politically connected enterprises. Additionally, the effect of state-owned capital on agency costs mainly comes from the shareholding of non-financial institutions. This study provides empirical evidence on the effect of state-owned capital intervention on two types of agency problems in private enterprises, helping to understand the governance effect of “reverse mixed–ownership reform".

Key words:

reverse mixed-ownership reform, governance effect, agency cost, private companies

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