State Capital Refocusing and Innovation-Driven Development: Evidence from Beijing Municipal SOEs

This study examines whether state capital refocusing promotes innovation-driven development by reshaping the scale and technological direction of innovation in state-owned enterprises (SOEs). Using 499 firm-year observations for 42 Beijing municipal SOEs from 2013 to 2024, we distinguish innovation output from innovation allocation across invention-oriented, green, and internationally oriented patents. Two-way fixed-effects estimates show that a one-standard-deviation increase in core business focus is associated with increases of 0.610, 0.468, 0.383, and 0.090 log points in overall, invention-oriented, green, and internationally oriented innovation output, respectively. Refocusing also raises the shares of invention-oriented and green innovation, while leaving the international share unchanged. The main patterns remain broadly robust to alternative measures, additional controls, alternative specifications, and a continuous-treatment difference-in-differences design based on the 2020–2022 SOE Reform Three-Year Action Plan. Mechanism analyses provide evidence consistent with industrial-chain control as an important transmission channel, while heterogeneity analyses show that functional missions, industrial-chain positions, and strategic-sector status condition the effects. The findings indicate that state capital refocusing influences not only how much SOEs innovate, but also where innovation resources are directed, providing firm-level evidence on how public-capital reallocation can support mission-oriented innovation.