State Ownership and the Sustainable Development of Private Enterprises: Exploring the Role of State Ownership Participation

The sustainability of private enterprises is foundational to the high-quality development of the national economy. This paper investigates the role of state ownership in enhancing the sustainable development of private enterprises, utilizing data of A-share private enterprises in China from 2009 to 2022. The findings indicate that state ownership significantly enhances sustainable development of private enterprises, with government agencies yielding a more pronounced effect compared to state-owned enterprise. Mechanism analyses show that state ownership enhances sustainable development by increasing research and development (R&D) investments and efficiency, as well as by enhancing environmental information quality. Furthermore, results show that the influence is more pronounced in private firms with greater financing constraints, severe principal-agent problems, and higher competitive pressures. This study contributes to the understanding of the guiding role of state ownership in the sustainable development of private firms, particularly in the context of weak external institutions.