State-owned capital and debt default risk: Evidence from private enterprises

As a stabilizer of economic development, whether state-owned capital can help prevent and resolve the risk of debt default in private enterprises needs to be further tested. Based on this, this paper takes Shanghai and Shenzhen A-share private listed companies from 2008 to 2022 as the research sample and deeply explores the degree of influence and mechanism of state-owned capital's shareholding on the risk of debt default in private enterprises. The results of the paper show that state-owned capital can significantly reduce the debt default risk of private enterprises. The mechanism test finds that the above inhibitory effect is mainly carried out through the paths of resource effect and governance effect. Further tests show that when regional legal and institutional environment is imperfect, local financial resources are strong, and regional economic development is poor, inhibitory effect of state-owned capital on the debt default risk of private enterprises is more significant. The economic consequence test finds that state-owned capital shareholding reduces debt default risk and helps optimize the debt maturity structure of private enterprises. This paper enriches the research on the economic consequences of state-owned capital participation and the factors affecting corporate debt default risk, providing theoretical support for government departments to improve the effectiveness of mixed-ownership reform.