"Reverse Mixed Ownership Reform" and Digital Transformation of Private Enterprises: From the Perspective of State-owned Capital Participation

Private enterprises are an important entity in promoting high-quality economic development and building a modern economic system in China. How private enterprises can promote their digital transformation is of great strategic significance. Based on the perspectives of resource effect and governance effect, this paper explores the impact of state-owned capital participation in the "reverse mixed ownership reform" on the digital transformation of private enterprises. It is found that state-owned capital participation has a significant promoting effect on the digital transformation of private enterprises. And this empirical result persists even after a series of robustness tests. The mechanism analysis reveals that state-owned capital participation is beneficial for alleviating the shortage of digital talents and agency conflicts in private enterprises, thereby empowering their digital transformation. The heterogeneity analysis shows that the digital incentive effect of state-owned capital participation is more significant in small and medium-sized private enterprises, private enterprises with high growth potential, private enterprises with high industry concentration, and private enterprises with single state-owned shareholder participation. These conclusions provide empirical evidence and path reference for clarifying the linkage mechanism of state-owned capital participating in private enterprises to jointly promote digital development, and stimulating the vitality of private economy development through reverse mixed ownership reform.