Can reverse mixing reform promote innovation inputs? Evidence from China

This study explores how state-owned capital affects innovation investments in private firms, emphasising second-type agency costs and organisational redundancy. Results show that the innovation investment of private enterprises not only depends on whether state-owned capital participates. The increase in the proportion of state-owned capital holdings, the enhancement of checks and balances on private enterprises, and the prolongation of equity participation time will significantly increase innovation investment in private enterprises. Reducing the second type of agency cost for enterprises and improving the efficiency of utilising unabsorbed redundant resources are two important mechanisms. These results are further confirmed through robustness checks.