Abstract:

Performing public welfare functions is the basic duty and obligation of state-owned enterprises （SOEs）. Pursuing economic benefits is an important guarantee for SOEs to integrate into the international market， participate in international and domestic market competition and achieve sustainable development. It is an important issue faced by the mixed ownership reform of SOEs for how to improve the operating performance of SOEs by optimizing the ownership （including equity and control rights） structure between state-owned shareholders and non-state-owned shareholders under the constraint of public welfare functions. Relevant documents， such as the Guiding Opinions on Deepening the Reform of SOEs issued by the Central Committee of China Communist Party and the State Council in 2015， proposed measures to promote the mixed ownership reform of SOEs through classification and stratification. However， these documents lack strong theoretical and practical evidence support. It is of great theoretical and practical significance to clarify the effect mechanism of public welfare functions and ownership structure on operating performance of mixed-ownership SOEs from both theoretical and empirical perspectives for ensuring the sustained， stable and healthy development of SOEs.

Based on the in-depth investigation of interest distribution and control allocation between state-owned and non-state-owned shareholders in mixed ownership SOEs， an optimization decision-making model among state-owned shareholders， non-state-owned blockholders and executives is constructed to theoretically reveal the effect mechanism of public welfare functions and ownership structure on operating performance of mixed ownership SOEs. Then， the A-share state-owned listed companies in Shanghai and Shenzhen during 2010-2018 are selected as samples， and the operating performance of SOEs is measured by the market value， and the public welfare functions of SOEs is measured by the corporate social responsibilities， and the equity structure and control structure are measured by the degree of equity integration and the proportion of the number of directors， supervisors， and senior executives appointed by non-state-owned shareholders among the top ten shareholders to the total number of directors， supervisors， and senior executives， an empirical testing on the theoretical model results is conducted. The following conclusions are obtained. The public welfare functions undertaken by SOEs will present a significantly negative effect on the operating performance. Strengthening non-state-owned blockholder’s participation in the substantive corporate governance of SOEs and increasing the degree of equity integration between state-owned shareholder and non-state-owned blockholder can remarkably improve the operating performance of SOEs. It is achievable to improve the operating performance of SOEs by optimizing the shareholder ownership structure while keeping the public welfare functions undertaken by SOEs unchanged. This study provides theoretical evidence and implementation path for Chinese SOEs， under the constraints of public welfare functions， to optimize the equity structure and control structure and further promote the mixed ownership reform.

Based on the above theoretical and empirical research results， combined with the development status of SOEs and their mixed ownership reform goals， the following policy suggestions are put forward. First， the “stronger， better and bigger state-owned capital and SOEs” should always be the fundamental goal of the mixed ownership reform of SOEs. The mixed ownership reform cannot fail to be implemented due to the need to fulfill public welfare functions， nor can the so-called “national retirement and civilian advancement” be implemented due to pursue economic benefits. Balancing public welfare and operational functions is an effective way to promote the mixed ownership reform of SOEs. Second， in the process of mixed ownership reform of SOEs， it is not only necessary to improve the equity structure of SOEs by introducing non-state-owned shareholders， which formally achieves the goal of mixed ownership reform， but also to strengthen the substantive participation of non-state-owned shareholders in corporate governance， and effectively protect the right of non-state-owned shareholders to participate in operating decision-making， which essentially promotes the mixed ownership reform of SOEs.

Key words: mixed-ownership system, SOEs, public welfare function, ownership structure, operating performance