Mixed-ownership reform and factor misallocation: Evidence from China.

An enterprise's ownership structure is crucial for factor allocation efficiency. We used Chinese firm-level data to investigate whether changes in state-owned enterprise ownership structure contribute to resource misallocation, leading to high-quality economic development. We found a U-shaped relationship between non-state shareholding and state-owned enterprises' resource allocation efficiency. An optimal range exists for non-state shareholding. When the shareholding of non-state shareholders reaches 10%-20%, the efficiency of resource allocation is at its highest. Additional research has revealed that mixed shareholding has varying impacts on resource allocation, displaying substantial heterogeneity. These insights offer valuable guidance for future mixed-ownership reforms and serve as a practical reference for economic reforms in other nations, particularly developing countries.