The Impact of State-Owned Capital Participation on Carbon Emission Reduction in Private Enterprises: Evidence from China

Abstract

Carbon emission reduction serves as a pivotal strategy for advancing global environmental quality and sustainable socioeconomic development. Private enterprises serve as the primary contributors to industrial carbon emissions. Their low-carbon transition is directly tied to the achievement of China’s Dual Carbon Goals. However, constrained by market failures and the profit-driven nature of capital, these enterprises face significant challenges in both motivation and capacity for carbon emission reduction. As a critical link connecting government and market forces, whether state-owned capital can effectively drive private enterprises to reduce emissions and conserve energy still lacks systematic empirical evidence. Leveraging a panel dataset of private industrial listed companies on China’s Shanghai and Shenzhen A-share markets spanning 2008–2022, we examine the impact of state-owned capital participation on carbon emission reduction and the underlying mechanisms. The empirical results demonstrate that state-owned capital participation can significantly drive carbon emission reduction and propel the low-carbon transformation of private enterprises. Mechanism analysis reveals that state-owned capital participation promotes carbon emission reduction through multiple avenues, including enriching the green resource base, strengthening the value recognition of environmental social responsibility, and improving energy efficiency. Further analysis indicates that the emission reduction effect of state-owned capital participation is more pronounced under conditions of weaker government environmental regulation, lower regional marketization, greater industry competition, and tighter green financing constraints. This study enriches the research on mixed-ownership reform and low-carbon transition of enterprises, deepens the theoretical understanding of the internal mechanism of state-owned capital participation affecting carbon emission reduction, and offers empirical evidence for emerging economies to address the dilemma of emission reduction through property rights integration.

1. Introduction

Global warming, driven primarily by substantial greenhouse gas emissions, poses a grave global challenge [1]. As an emerging economy amidst rapid industrialization and economic growth, China has witnessed its industrial activities promote a sustained rise in aggregate energy consumption and carbon emissions. Data in the International Energy Agency’s (IEA’s) Carbon Emissions Report 2023 indicate that global carbon emissions from energy reached 37.4 billion tons in 2023. China’s carbon emissions reached 12.6 billion tons, an increase of 4.13% from 2022, representing a significant source of global emissions. It is evident that China continues its carbon-intensive economic growth after the epidemic and urgently needs to find effective ways to reduce carbon emissions [2]. In 2022, the report of the 20th CPC National Congress proposed the need to “promote the formation of green production methods and lifestyles in enterprises,” highlighting the critical role of enterprises in resource efficiency and greenhouse gas emissions control. In 2024, the Third Plenary Session of the 20th CPC Central Committee pointed out the need to “improve the ecological environment governance system and the mechanisms for green and low-carbon development.” It emphasized the coordinated advancement of carbon reduction, pollution reduction, green expansion, and economic growth, actively addressing climate change, and ultimately promoting the transformation of the economy and society toward green and low-carbon development through reforms.

Enterprises represent a primary source of carbon emissions and bear significant responsibility for economic activity and environmental governance. The 2023 Report on the Green and Low-Carbon Development Pathways of Chinese Small and Medium-sized Enterprises (SMEs) released by the Ministry of Industry and Information Technology (MIIT) highlights that SMEs account for 46% of the total carbon emissions in China’s industrial sector. Similarly, the Green Development Report of China’s Private Enterprises (2023) points out that private enterprises in high-energy-consumption industries dominate industrial carbon emissions, with the carbon emission intensity of private enterprises in sectors such as iron and steel and petrochemicals being significantly higher than that of state-owned enterprises (SOEs). Given that SMEs in China account for over 90% of the total number of industrial enterprises nationwide, and more than 90% of these SMEs are private enterprises, facilitating private enterprises’ proactive adoption of environmental social responsibility and accelerating their low-carbon transition represents a critical step toward synergistic development of the national economy and environmental sustainability [3].

Current research on carbon emission reduction determinants operates at three analytical levels. At the macro-level, policy control [4,5,6], economic structure [7], fiscal expenditures [8], openness [9], institutional pressure [10], geopolitical risks [11], and fintech [12] collectively influence carbon emission reduction. At the meso-level, scholars explore the effects of industry attributes [13], industry energy intensity [14], industry structure [15,16], and industry chain extension [17] on carbon emissions. At the micro-level, the existing research primarily concentrates on firm-level factors, such as digital transformation [18,19,20], technological advancement [21,22]. The above literature contributes to clarifying key influencing factors and underlying mechanisms of carbon emission reduction. However, it overlooks how enterprises can leverage external forces to allocate resources rationally during low-carbon transformation. An and Li [23] argued that the synergy between active government intervention and effective market mechanisms represents a crucial approach to facilitating pollution and carbon reduction in enterprises. At the micro-level, the integration of state-owned and private capital is significant for coping with environmental challenges and advancing carbon emission reduction.

Private enterprises, as the mainstay of the market economy, still face market failure caused by the externalities of the environment and the profit-seeking nature of capital, which often leads them to pay excessive attention to the scale of operation and economic efficiency, while neglecting environmental protection and low-carbon transformation. State-owned capital, as an instrument for implementing national policies, primarily aligns with national strategic objectives and is subject to substantial public scrutiny. These political attributes compel a stronger commitment to low-carbon development goals. Song, et al. [24] demonstrated that, relative to private enterprises, SOEs allocate more resources to environmental protection initiatives and exhibit a higher propensity to engage in environmental conservation efforts. It can be seen that state-owned capital can provide assistance for enterprise green production and energy-saving emission reduction. Private enterprises lag behind SOEs in their willingness and achievement of carbon emission reduction targets. Therefore, it is particularly important for private enterprises to take advantage of the support from the government, absorb the resources and institutional advantages of state-owned capital, and effectively employ market-based mechanisms for carbon emission reduction.

State-owned capital participation has emerged as one of the primary channels through which the government engages in the economic operations of private enterprises [25]. The 19th National Congress report stated that “state-owned capital was encouraged to take stakes in non-state-owned enterprises in a variety of forms”. The 20th National Congress Report further proposed to “unswervingly encourage, support, and guide the development of the non-public economy” and articulated the strategic objective of “promoting the development and growth of the private economy.” In the 2023 “Opinions of the CPC Central Committee and State Council on Promoting the Development and Strengthening of the Private Economy”, the government explicitly emphasized its support for private enterprises in implementing carbon emission reduction. In the context of the historical convergence of the Dual Carbon Goals and economic system reform, handling the relationship between the government and the market provides a favorable opportunity for state-owned capital to acquire stakes in private enterprises and carry out green governance activities. Private enterprises face multiple obstacles in environmental governance, including financing constraints stemming from information asymmetry with financial institutions [26], insufficient investment motivation due to environmental externalities [27], and excessive energy consumption arising from inadequate environmental awareness. These challenges render pure market mechanisms inadequate for driving their low-carbon transition. State-owned capital participation addresses these dilemmas by transforming internal power structures within enterprises [28]. Firstly, state-owned capital brings financial and policy support to private enterprises, enhances their ability to obtain resources [29], and provides preferential channels for enterprises to access real-time information on the government’s green innovation initiatives, while also offering more funding sources for green technology R&D [30]. Secondly, private enterprises experience permeation of governmental environmental objectives, which reinforces their commitment to environmental social responsibilities [31]. This integration progressively incorporates the government’s green development strategies and environmental governance goals into operational decision-making [32], prompting proactive scaling up of pollution abatement initiatives [33]. Thirdly, state-owned capital participation introduces heightened environmental oversight [34], with appointed personnel monitoring resource wastage during production processes [35]. This governance arrangement incentivizes enterprises to enhance low-carbon technological retrofitting, improve energy utilization efficiency, and accelerate carbon emission reduction. Thus, whether state-owned capital participation can have an impact on carbon emission reduction in private enterprises as expected constitutes the central inquiry of this study.

Based on this, we empirically examine private industrial listed companies in Shanghai and Shenzhen A-shares from 2008 to 2022 and investigate the impact of state-owned capital participation on private enterprises’ carbon emission reduction and its underlying mechanisms. The possible contributions are as follows:

Firstly, we extend the research on state-owned capital participation to its green governance function. Most of the existing studies have explored the economic consequences of state-owned capital participation from financial behavior based on signaling theory, resource-based theory, and principal-agent theory, considering a variety of financial consequences on investment [36,37], financing [38,39,40], and allocation [41]. However, few studies have addressed state-owned capital’s latent green governance functions, with current research primarily concentrated on ESG performance [42], green innovation [43], and greenwashing practices [44]. This paper explores the carbon emission reduction effect of state-owned capital participation in private enterprises based on the low-carbon transformation target, thereby supplementing the literature and empirical evidence on the economic consequences of state-owned capital participation within the green governance framework.

Secondly, we enrich the research on carbon emission reduction influencing factors. The existing literature examining determinants of carbon emission reduction predominantly utilizes provincial or municipal data to investigate the impact of factors, such as the digital economy [45] and industrial policies [46], on regional decarbonization outcomes. However, focusing specifically on the drivers of carbon emission in private enterprises within mixed-ownership reform contexts, Jiang, Yuan and Yang [34] empirically examined how state-owned capital infusion affects SO₂ emissions. Qian and Li [35] further investigated the influence of directors appointed by state shareholders on corporate carbon emission intensity. This study transcends the limitations of single-metric approaches by constructing measurement indices of state-owned capital participation characteristics across two corporate governance dimensions: ownership governance and top-level governance. We critically examine how government-guided private enterprises enhance carbon abatement magnitude through state-owned capital intervention, thereby addressing the pivotal practical concern of whether state-owned capital participation in China can concurrently advance environmental preservation and economic prosperity.

Thirdly, we uncover the “black box” of how carbon emission reduction occurs through state-owned capital participation in private enterprises. Prevailing research concurs that state-owned capital participation operates primarily through either resource effects [31] or governance effects [35]. This study further identifies the internal mechanism of carbon emission reduction of private enterprises under the joint action of the government and the market, demonstrating that the resource base, value recognition, and enhancement in energy efficiency are the primary pathways for state-owned capital to promote carbon emission reduction, thereby extending the scope of the investigation on private enterprises’ carbon emission reduction pathways.

2. Theoretical Analysis and Research Hypotheses

Carbon emission reduction constitutes a complex system. Conceptually, it refers to reduced aggregate carbon emissions, specifically reducing anthropogenic carbon dioxide (CO₂) emissions to mitigate climate challenges. It also includes reductions in carbon emission intensity [47], defined as lower carbon emissions per unit of economic output in firms. For industrial enterprises with high carbon emissions, reduction is typically achieved through adopting advanced green technologies, process transformation, and improved energy efficiency, constituting a restructuring of production systems driven by green strategies [48]. Sustainable development theory asserts that while pursuing economic benefits, enterprises also seek sustainable development of society, environment, and culture [49]. In spite of the profit-seeking nature of the current capital of private enterprises, they frequently neglect balanced economic–environmental development.

The participation of state-owned capital in private enterprises incorporates both the “mixing” of equity and the “reform” of governance, which is manifested in its involvement in private enterprises not only through holding shares to obtain corresponding dividend rights but also through appointing directors, supervisors, and executives to gain daily management rights, thereby substantively engaging in the green governance activities of private enterprises [50]. In this process, resources, responsibility, and efficiency constitute critical foundations for sustained carbon emission reduction in private enterprises. This paper explores how state-owned capital participation drives the low-carbon transition of private enterprises through three pathways, namely, resource base, value recognition, and energy efficiency, demonstrating significant theoretical and practical significance.

We select resource base, value recognition, and energy efficiency as the primary pathways through which state-owned capital promotes carbon emission reduction in private enterprises, motivated by three compelling rationales. Firstly, within the theoretical framework, the three pathways function sequentially to establish a complete logical chain of “resource empowerment–cognitive transformation–efficiency enhancement”. Resource empowerment serves as a critical precondition for achieving carbon emission reduction. Grounded in resource dependence theory, private enterprises face constraints in accessing green financing and policy intelligence for decarbonization [31]. The participation of state-owned capital provides institutional resources, which addresses the question of “how external resources alleviate the input barriers for enterprises’ carbon emission reduction”. Cognitive transformation serves as the core driver for achieving carbon emission reduction. Grounded in social identity theory, the political attributes of state-owned capital facilitate the internalization of governmental environmental objectives into corporate values through equity integration and personnel appointments [36], shifting emission reduction motivation from passive compliance to proactive practice. Enhancing efficiency constitutes a direct pathway to carbon emission reduction. Grounded in principal-agent theory, state-owned capital participation improves energy utilization efficiency through governance oversight in green technology R&D and production processes [26]. Secondly, regarding the literature dialogue, extant studies have separately demonstrated state-owned capital’s impacts on enterprise resource acquisition [51], ESG performance [42], and energy efficiency, yet they fail to integrate their mediating roles within the emission reduction mechanism. This study thus provides a novel synthesis that extends and deepens prior scholarship. Thirdly, within the Chinese context, the three pathways align with the practical imperatives of the Dual Carbon Goals and mixed-ownership reform. The resource-based pathway tackles ownership discrimination in green financing for private enterprises. The value recognition pathway reinforces corporate allegiance to national green strategies. The energy efficiency enhancement pathway specifically addresses China’s industrial high-energy-intensity profile, offering a low-cost decarbonization solution. In summary, this study adopts these three pathways to collectively elucidate the underlying mechanisms through which state-owned capital influences carbon emission reduction in private enterprises.

2.1. State-Owned Capital Participation and Carbon Emission Reduction in Private Enterprises

Enterprises can reduce energy consumption and CO₂ emissions during resource utilization through technological transformation [52]. Different forms of corporate capital organization have different resource endowments, values, and governance structures [53], thereby exhibiting varying attitudes toward and capacities for low-carbon transformation and environmental protection objectives. At present, although carbon emission reduction has become essential for private enterprises’ sustainable development, most enterprises prioritize short-term profit maximization and scale expansion. This is because private enterprises need a large amount of capital investment in the early stage to achieve energy savings and emission reduction. If the short-term gains from emission reduction fall below private shareholders’ anticipated profits, enterprises may engage in higher-carbon production activities, diverting resources from environmental protection investments. Luo, et al. [54] pointed out that SOEs with a government background can receive policy support and priority from the government, while it is difficult for private enterprises to obtain such treatment. State-owned capital, as a form of special property rights with noneconomic attributes that set it apart from private capital [55], is a major policy tool for the government to realize environmental governance. The use of state-owned capital to achieve government development goals has gradually become a viable approach within the national environmental governance system. As a result, state-owned capital has stronger incentives and potential advantages in facilitating private enterprises’ low-carbon transformation.

Firstly, the participation of state-owned capital introduces diversified equity structures to private enterprises. By harnessing the market mechanism’s functions of information aggregation and resource allocation, while simultaneously utilizing policy support, it motivates enterprises to undertake and execute energy-saving, environmental protection, and new energy development investment projects, assisting enterprises in reducing carbon emissions during the production process [56]. Secondly, the scarcity of knowledge, talent, and technology in green governance within private enterprises presents challenges to carbon emission reduction [57]. The entry of state-owned capital, along with its appointed directors, supervisors, and executives, diversifies the knowledge, culture, and vision of private enterprises, thereby forming a rich and heterogeneous resource pool. Heterogeneous capital fusion and exchanges facilitate the accelerated flow of abatement resources. This enables private enterprises to formulate and implement internally a green management system, cultivate employees’ energy-saving and emission-reduction awareness, and execute environmentally friendly abatement behaviors [22]. Thirdly, state-owned capital shareholding and appointed personnel enable an in-depth understanding of private enterprises’ operational status and environmental practices. They recommend that talent with advanced environmental philosophies and extensive governance experience participate in corporate governance, ensuring timely and precise access to policy information on green development [58]. This effectively curtails potential greenwashing tendencies and short-sighted behaviors among original management [44]. Leveraging this information advantage, state-owned capital supervises and assists private enterprises in formulating scientific green governance decisions, significantly mitigating the risks and uncertainties associated with energy conservation and emission reduction initiatives and enhancing the effectiveness of carbon emission reduction.

Based on the above analysis, the following hypothesis is proposed in this paper:

Hypothesis 1 (H1). 

State-owned capital participation can directly promote carbon emission reduction in private enterprises.

2.2. The Resource-Based Path

The green resource base constitutes a critical foundation for achieving carbon emission reduction effects. Corporate strategy is constrained and relies on resource allocation [59]. SOEs with sufficient resources possess greater capacity to respond to institutional pressures and pursue environmentally protective practices [60]. China’s financial system favors SOEs with political identity and superior market position in terms of capital allocation [61] while being reluctant to lend to private enterprises without government backing [62]. This leads to severe financing constraints for private enterprises, impeding their low-carbon transformation efforts [27]. According to the resource-based theory, resources with uniqueness and value are the main source for enterprises to form innovative power and lasting competitiveness [63]. The involvement of state-owned capital essentially enables private enterprises to obtain policy and resource support from the government. Firstly, as a direct manifestation of political connection, state-owned capital participation establishes a symbiotic relationship between private enterprises and government entities, aligning their interests with low-carbon transformation. In pursuit of this shared interest, state-owned capital brings social resources and preferential policies, particularly enabling private enterprises to obtain environmental subsidies and regulatory industry access [64]. It alleviates the financial burden on private enterprises implementing pollution and carbon reduction initiatives. Secondly, drawing on signaling theory, the economic behavior of state-owned capital participating in private enterprises largely represents the direction of national policies and plays the role of a “policy vane”. It facilitates private enterprises in accessing preferential resource allocations, such as government environmental subsidies, and also enhances the success rate and loan amount of borrowing from financial institutions like banks [65], providing specialized funds for private enterprises to conduct energy conservation and emission reduction initiatives. Thirdly, state-owned capital participation in private enterprises creates a distinct shareholder cohort representing public interests and committed to green governance. This participation establishes balanced equity structures and board compositions while curbing controlling shareholders’ decision-making monopoly in strategic governance. Furthermore, it encourages enterprises to allocate environmental subsidies toward green production, fosters energy conservation systems and green product development, and lowers carbon emissions while mitigating environmental pollution.

Based on the above analysis, the following hypothesis is proposed in this paper:

Hypothesis 2 (H2). 

State-owned capital participation promotes carbon emission reduction in private enterprises by facilitating access to government environmental protection subsidies.

2.3. The Value Recognition Path

The value recognition of low-carbon development is an important motivation for private enterprises to improve carbon emission reduction effects. Environmental social responsibility constitutes the basic belief and guidance for corporate carbon reduction initiatives. Thus, private enterprises’ value recognition of low-carbon transition goals manifests through environmental social responsibility fulfillment. Private enterprises, which attach great importance to economic benefits, may exhibit ambiguity in aligning with government objectives and tend to demonstrate weaker awareness of disclosing environmental social responsibility information [3]. It is therefore imperative for government departments to guide them through macro-policies and capital market reforms to shift toward an environmentally profitable model. Social identity theory states that individuals categorize themselves into specific social groups and are inclined to uphold and support organizations congruent with their social identities [66,67].

The infusion of state-owned capital intrinsically confers a new organizational identity upon private enterprises. Through identification with this reconstituted identity, management internalizes the environmental values embodied by state capital [60], proactively advancing ecological conservation objectives aligned with its political attributes, thereby sustaining green governance initiatives. Firstly, when state-owned capital enters a private enterprise as a shareholder, it inevitably involves interactions and negotiations between heterogeneous shareholders. The original management and employees of the private enterprise engage with the State-owned Assets Supervision and Administration Commission (SASAC) and people within the enterprise where the state-owned capital is located. During this process, under the guidance of government objectives, management personnel subtly foster a robust awareness of environmental social responsibility [31] and drive enterprises to undertake carbon emission reduction initiatives. Secondly, some state-owned shareholders participate in private enterprise governance by appointing directors, supervisors, and executives. Compared with private entrepreneurs and professional managers who are selected and hired through marketization, state-owned capital appointees remain affiliated with the SASAC or SOEs, and they exhibit bureaucratic attributes, demonstrating strong alignment with the national low-carbon development policy [68]. They are more inclined to drive private enterprises to adopt environmentally sustainable production and operational models and achieve the green and low-carbon emission reduction targets advocated by the government, thereby undertaking low-carbon social responsibilities and promoting pollution reduction and carbon emission mitigation [42]. Thirdly, according to stakeholder theory and signaling theory, state-owned capital can compensate for the regulatory failures of private enterprises through equity participation, guide enterprises to actively fulfill their social responsibility, and enhance the transparency of environmental information disclosure [69]. Moreover, it sends positive signals to stakeholders, attracting more social attention and public investment, and providing financial support for enterprises to implement carbon reduction initiatives.

Based on the above analysis, the following hypothesis is proposed in this paper:

Hypothesis 3 (H3). 

State-owned capital participation promotes carbon emission reduction in private enterprises by strengthening environmental value recognition.

2.4. The Energy Efficiency Path

Enhancing energy utilization efficiency represents a fundamental approach for private enterprises to reduce carbon emissions. China’s long-standing advantages in coal resources and prices have led to a coal-dominated energy structure that is expected to persist for an extended period. Consequently, improving energy utilization efficiency has emerged as a crucial means for China to achieve energy conservation and emission reduction goals [56]. The optimization of resource allocation and the upgrading of production processes can assist enterprises in enhancing their energy use efficiency, thereby contributing to productivity enhancement [70]. Thus, total factor productivity is a direct result of the change in energy utilization efficiency of enterprises. For private enterprises facing current resource constraints, it is extremely challenging to rely solely on market mechanisms to rectify the inefficiencies in resource allocation caused by externalities. Therefore, it is necessary to intervene in the economic activities of private enterprises through state-owned capital, which represents government demands. Firstly, after obtaining resource endowments from state-owned capital, private enterprises accumulate sufficient resource stocks. At this juncture, these enterprises generally exhibit stronger absorptive capacity, which allows them to more effectively identify, absorb, transform, and utilize existing resources and knowledge [71,72] to improve energy use efficiency. Secondly, green innovation plays a pivotal role in enhancing energy utilization efficiency and ultimately improving the effectiveness of carbon emission reduction [73]. The development and application of green and low-carbon technologies boost the allocation efficiency of different combinations of production factors, resulting in a significant increase in the utilization efficiency of multiple production factors, including energy [74]. Ma and Yang [75] indicated that with technological progress, the energy usage efficiency of enterprises also increases. State-owned capital participation provides strong support for the research and development of green and low-carbon technologies for private enterprises, thereby ensuring enterprises’ carbon emission reduction efforts. Thirdly, in line with the principal-agent theory, once the personnel appointed by state-owned capital enter private enterprises to conduct green governance, they are able to more accurately monitor the production process, optimize the allocation of production factors, and improve production efficiency. This facilitates resource reallocation toward clean energy investment, reducing traditional energy dependence and consequently lowering enterprise carbon emissions [76].

Based on the above analysis, the following hypothesis is proposed in this paper:

Hypothesis 4 (H4). 

State-owned capital participation promotes carbon emission reduction in private enterprises by enhancing energy utilization efficiency.

In conclusion, Figure 1 illustrates the theoretical framework delineating the impact of state-owned capital participation on carbon emission reduction in private enterprises.

3. Research Design

3.1. Sample Selection and Data Sources

This study selected annual data from 2008 to 2022 for private industrial listed companies on China’s Shanghai and Shenzhen A-share markets as its initial research sample based on three primary considerations. Firstly, private industrial enterprises represent significant sources of energy emissions and resource consumption. Against the backdrop of China’s ongoing mixed-ownership reforms, there is an urgent need to examine the mechanisms and effects of state-owned capital participation on their carbon emission reduction. Secondly, China implemented new accounting standards in 2007. The sample period commences in 2008 to prevent distortions arising from the transition between old and new accounting standards, thereby ensuring data comparability. Thirdly, the Shanghai Stock Exchange and Shenzhen Stock Exchange comprehensively cover enterprises across all 31 provinces, autonomous regions, and municipalities directly under the central government, providing nationally representative geographical coverage. Moreover, the data disclosed by listed companies are highly transparent and can meet the strict requirements of empirical analysis for variable measurement and endogeneity treatment. On this basis, we conducted the following sample refinements: (1) Removed ST, *ST, or delisted firms during the period; (2) excluded samples with abnormal financial indicators (asset–liability ratio ≥1 or ≤0 and operating income <0); (3) excluded samples with missing key variables; and (4) excluded samples with unverifiable ownership data across standard databases, annual reports, and company websites. Finally, this paper obtained 14,182 firm-year observations.

The basic data of state-owned capital participation were manually organized by checking the annual reports of private listed companies and relevant information websites. In addition, the data for measuring the carbon emission reduction effect of enterprises were obtained from the China Industrial Economy Statistical Yearbook and China Energy Statistical Yearbook, the industry classification was obtained from the Wind database, and the data for other major variables were obtained from the CSMAR database and the China Research Data Service Platform (CNRDS). All continuous variables are winsorized at the 1% level to control the effect of extreme values.

3.2. Model Construction

Drawing on the research of Zeng, Li, and Li [40], this paper established the following regression model to examine the impact of state-owned capital participation on private enterprises’ carbon emission reduction:

$${CERID}_{i,t}={\alpha }_0+{\alpha }_1{DSOE}_{i,t}+{\alpha }_2{CONTROLS}_{i,t}+{\eta }_{YEAR}+{\eta }_{IND}+{\epsilon }_{i,t}$$

(1)

where i represents the firm; t represents the year; ε is the random error term of the regression model; the explained variable ${CERID}_{i,t}$ represents the firm $i$ the effect of carbon emission reduction in year t; $DSOE$ is the explanatory variable for state-owned capital participation; and $CONTROL\mathrm{S}$ represents all control variables. This paper controlled for year ${\eta }_{YEAR}$- and industry ${\eta }_{IND}$-level fixed effects to effectively mitigate the endogeneity problem caused by omitted variables. In addition, drawing on Cuculiza, et al. [77], T-statistics adjusted for the robust standard error of clustering at the firm level were used to ease possible model serial correlation problems. This paper focused on the regression coefficients ${\alpha }_1$, and if Hypothesis H1 is valid, then ${\alpha }_1$ should be significantly positive. The greater the degree of state-owned capital participation, the stronger its carbon reduction effect in private enterprises.

3.3. Definition of Variables

3.3.1. Explained Variable

The explained variable is the carbon emission reduction effect (CERID). Referring to the study by Fan and Zhang [78], we measured emission reduction using carbon emission intensity decline in private industrial enterprises, which reflects enhanced carbon reduction capabilities. This paper drew on the relevant practices of Chapple, et al. [79] and Shen and Huang [1] to measure the carbon emission intensity by the ratio of CO₂ emissions to operating revenues of industrial enterprises. Among them, CO₂ emissions were estimated based on industry energy consumption. The data on industry’s main business cost and industry total energy consumption were obtained from the China Industrial Economy Statistical Yearbook and China Energy Statistical Yearbook, respectively. The CO₂ conversion factor was set as 2.493, per Xiamen Energy Conservation Center standards. A larger decline in carbon emission intensity indicates better corporate carbon effect. The specific formula is shown as follows:

$$\begin{gathered} CERID={\displaystyle \frac{Carbon emission intensity in year t-1-Carbon emission intensity in year t}{Carbon emission intensity in year t-1}} \\ \mathit{Carbon}\mathit{emission}\mathit{intensity}= {\displaystyle \frac{{CO}_2 emissions}{Main business income of the enterprise\times 1000000}} \\ {\mathrm{CO}}_2 \mathrm{emissions}={\displaystyle \frac{Main business cost of the enterprise}{Main business cost of the industry}}\times total energy consumption of the industry \\ \times {CO}_2 conversion factor \end{gathered}$$

We adopted this measurement approach because of the absence of mandatory disclosure requirements for enterprise carbon emissions data in China. Enterprises rarely directly report their carbon emissions [22]. The China Energy Statistical Yearbook systematically documents energy consumption data by industry, providing authoritative and continuous coverage. This study concentrated on private industrial enterprises, where energy consumption and carbon emissions demonstrate strong sectoral correlations. Using the “proportion of an enterprise’s business costs to the industry’s total business costs” to reflect its energy consumption weighting within the sector reasonably demonstrates the alignment between the enterprise’s production scale and its carbon emissions. Additionally, this methodology has been applied in multiple studies related to carbon emissions [19,75,80], reducing discretionary estimation bias and demonstrating general applicability.

3.3.2. Explanatory Variable

The explanatory variable is state-owned capital participation (DSOE), measured through two dimensions: equity governance and top-level governance. For the equity governance, drawing on Zeng, Li and Li [40] and Xu, et al. [81], the following indicators were constructed for measurement: the degree of state-owned capital participation (STATETS) was defined using a threshold of a 10% equity stake to identify state-owned major shareholders’ participation [82,83]. Specifically, if the state-owned largest shareholder holds a proportion of 10% or more, the variable was assigned a value of 1; otherwise, it was assigned a value of 0. Counterbalance degree of state-owned capital (STATEB) was defined as the ratio of the sum of equity holdings of state-owned shareholders to the sum of equity holdings of non-state-owned shareholders among the top ten shareholders. For the top-level governance, drawing on Song, et al. [84] and Yao, et al. [85], the proportion of appointed directors and the proportion of directors, executives, and supervisors by state-owned shareholders among the top ten shareholders were used to measure the degree of state-owned capital director governance (STATE_D) and the degree of state-owned capital director, executive, and supervisor governance (STATE_DJG).

3.3.3. Control Variables

Considering the many other factors that may simultaneously affect state-owned capital participation and carbon emission reduction, drawing on the studies by He, Zeng and Zhang [38] and Huang, et al. [86], this paper controlled for the following variables. At the level of operating conditions, seven variables were selected, namely, firm size (SIZE), market value (TQ), asset–liability ratio (LEV), growth capacity (GROWTH), cash flow ratio (CASH), capital intensity (CI), and firm age (AGE). At the level of corporate governance characteristics, five variables are selected, namely, executive compensation (COMP), political affiliation (PC), duality (DUAL), board size (BARD), and percentage of independent directors (INDEP). The definitions and descriptions of the specific variables are shown in

Table 1. Variable definitions and descriptions.

Variable Type	Variable Name	Symbol	Measurement of Variable
Explained variable	Carbon emission reduction effects	CERID	The decrease in carbon emission intensity of enterprises, equal to (carbon emission intensity in year t − 1 − carbon emission intensity in year t)/carbon emission intensity in year t − 1
Explanatory variable	Degree of state-owned capital participation	STATETS	Dummy variable that takes the value of 1 if the proportion of shares held by the state-owned largest shareholder reaches 10%; otherwise, it takes the value of 0
	Counterbalance degree of state-owned capital	STATEB	The sum of the shareholding ratios of state-owned shareholders among the top ten shareholders/the sum of the shareholding ratios of non-state-owned shareholders among the top ten shareholders
	The degree of state-owned capital director governance	STATE_D	The number of directors appointed by state-owned shareholders among the top ten shareholders/total number of board of directors
	The degree of state-owned capital director, executive, and supervisor governance	STATE_DJG	The number of directors, supervisors, and executives appointed by state-owned shareholders among the top ten shareholders/total number of directors, supervisors, and executives
Control variable	Firm size	SIZE	The natural logarithm of the total market value of the listed company
	Asset–liability ratio	LEV	Total liabilities/total assets
	Growth capacity	GROWTH	Percentage change in operating income over the fiscal year
	Cash flow ratio	CASH	Net cash flows from operating activities/total assets
	Capital intensity	CI	Total assets/operating income
	Market value	TQ	Company market capitalization/book value
	Firm age	AGE	Number of years the company has been listed
	Executive compensation	COMP	The natural logarithm of the total compensation of the top three executives
	Political affiliation	PC	If the chairman or general manager has served or is currently serving as a government official, it takes 1; otherwise, it takes 0
	Duality	DUAL	Dummy variable; if the chairman concurrently serves as the general manager, it takes 1; otherwise, it takes 0
	Board size	BOARD	The natural logarithm of the total number of board directors
	Proportion of independent directors	INDEP	The number of independent directors/total number of board directors

.

4. Empirical Results

4.1. Descriptive Statistics

Table 2. Descriptive statistics of main variables.

Variable	N	Mean	Sd	Min	P25	P50	P75	Max
CERID	14,182	−0.026	0.211	−2.865	−0.089	0.004	0.08	0.842
STATETS	14,182	0.038	0.191	0	0	0	0	1
STATEB	14,182	0.038	0.096	0	0	0	0.027	0.897
STATE_D	14,182	0.005	0.039	0	0	0	0	0.500
STATE_DJG	14,182	0.003	0.022	0	0	0	0	0.375
SIZE	14,182	22.44	0.910	20.53	21.78	22.30	22.94	25.94
LEV	14,182	0.366	0.179	0.028	0.221	0.357	0.494	0.925
GROWTH	14,182	0.172	0.336	−0.555	−0.011	0.125	0.289	2.809
CASH	14,182	0.051	0.067	−0.208	0.013	0.049	0.090	0.351
CI	14,182	2.218	1.427	0.341	1.357	1.860	2.606	17.17
TQ	14,182	2.169	1.302	0.837	1.387	1.765	2.451	13.98
AGE	14,182	1.838	0.717	0.693	1.386	1.792	2.398	3.367
COMP	14,182	5.200	0.720	2.578	4.737	5.193	5.642	7.480
PC	14,182	0.319	0.466	0	0	0	1	1
DUAL	14,182	0.399	0.490	0	0	0	1	1
BOARD	14,182	2.082	0.183	1.609	1.946	2.197	2.197	2.565
INDEP	14,182	0.376	0.0500	0.333	0.333	0.357	0.429	0.571

presents the descriptive statistics of the main variables. From the effect of carbon emission reduction, the mean value of CERID is −0.026, and the standard deviation is 0.211. This indicates that the current decline in the carbon emission intensity of the private enterprises is negative, and there is a large difference in carbon emission reduction among enterprises. The median is 0.004, and the maximum value is 0.842, indicating that more than half of the private enterprises have experienced a downward trend in carbon emission intensity. For equity governance, the mean value of STATETS is 0.038, indicating that 3.8% of the observations in the sample have a state-owned largest shareholder. The mean value of STATEB is 0.038, and the maximum value is 0.897, implying that state-owned capital serves as a significant equity counterweight, consistent with Xu, Li and Bai [81]. For top-level governance, the mean value of STATE_D is 0.005, with a standard deviation of 0.039, indicating that the average proportion of directors appointed by state-owned capital in private enterprises during the sample period is 0.5%, which is much lower than the average shareholding ratio of state-owned capital. The mean value of STATE_DJG is 0.003, with a standard deviation of 0.022, indicating that some state-owned shareholders securing board, supervisory committee, and executive positions following equity participation in private enterprises can exert substantive influence on corporate operational decision-making.

4.2. Correlation Analysis

Table 3. Correlation analysis of main variables.

Variable	CERID	STATETS	STATEB	STATE_D	STATE _DJG	SIZE	LEV
CERID	1
STATETS	0.008	1
STATEB	0.007	0.294 ***	1
STATE_D	0.028 ***	0.340 ***	0.201 ***	1
STATE_DJG	0.028 ***	0.375 ***	0.220 ***	0.881 ***	1
SIZE	0.065 ***	0.007	−0.003	−0.016 *	−0.016 *	1
LEV	0.010	0.031 ***	0.048 ***	−0.008	−0.001	0.116 ***	1
GROWTH	0.088 ***	−0.003	−0.010	0.004	−0.002	0.210 ***	0.077 ***
CASH	0.046 ***	−0.001	−0.004	−0.019 **	−0.014 *	0.228 ***	−0.156 ***
CI	−0.059 ***	0.026 ***	−0.003	0.047 ***	0.046 ***	−0.036 ***	−0.160 ***
TQ1	0.035 ***	0.018 **	−0.004	0.012	0.017 **	0.239 ***	−0.125 ***
AGE	0.027 ***	0.059 ***	0.061 ***	0.004	0.005	0.235 ***	0.302 ***
COMP	−0.074 ***	0.004	−0.002	−0.033 ***	−0.034 ***	0.489 ***	0.084 ***
PC	0.055 ***	−0.008	−0.014	−0.015 *	−0.007	0	0.011
DUAL	−0.019 **	−0.027 ***	−0.032 ***	−0.012	−0.011	−0.034 ***	−0.051 ***
BOARD	0.033 ***	0.096 ***	0.049 ***	0.043 ***	0.055 ***	0.075 ***	0.052 ***
INDEP	−0.012	−0.058 ***	−0.030 ***	−0.026 ***	−0.042 ***	−0.021 **	−0.022 ***
	GROWTH	CASH	CI	TQ	AGE	COMP	PC
GROWTH	1
CASH	0.001	1
CI	−0.135 ***	−0.226 ***	1
TQ	0.108 ***	0.073 ***	0.089 ***	1
AGE	−0.082 ***	0.011	0.032 ***	0.136 ***	1
COMP	0.063 ***	0.217 ***	−0.134 ***	−0.016 *	0.131 ***	1
PC	−0.017 **	−0.005	−0.019 **	−0.044 ***	0.013	−0.117 ***	1
DUAL	0.031 ***	−0.022 ***	0.012	0.021 **	−0.148 ***	0.036 ***	−0.093 ***
BOARD	−0.002	0.028 ***	−0.036 ***	−0.058 ***	0.076 ***	0.022 ***	0.055 ***
INDEP	0.013	−0.016 *	0.042 ***	0.036 ***	−0.044 ***	0.006	−0.021 **
	DUAL	BOARD	INDEP
DUAL	1
BOARD	−0.133 ***	1
INDEP	0.125 ***	−0.644 ***	1

Note: ***, **, and * indicate that the estimated coefficients are significant at the 1%, 5% and 10% levels, respectively.

reports the correlation coefficients of the main variables. Regarding equity governance, the correlations of STATETS and STATEB with carbon emission reduction are positive but statistically insignificant. Regarding top-level governance, both STATE_D and STATE_DJG demonstrate significant positive correlations with carbon emission reduction. This suggests that state-owned capital may play a role in carbon emission reduction in private enterprises through both equity governance and top-level governance, though the precise mechanisms require further investigation.

4.3. Benchmark Regression Results

Table 4. State-owned capital participation and carbon emission reduction of private enterprises.

	(1)	(2)	(3)	(4)
	CERID	CERID	CERID	CERID
STATETS	0.013 **
	(2.03)
STATEB		0.002 **
		(2.02)
STATE_D			0.100 ***
			(2.75)
STATE_DJG				0.163 ***
				(2.62)
SIZE	0.001	0.001	0.001	0.001
	(0.73)	(0.71)	(0.74)	(0.74)
LEV	−0.003	−0.003	−0.003	−0.003
	(−0.31)	(−0.29)	(−0.28)	(−0.30)
GROWTH	0.041 ***	0.041 ***	0.041 ***	0.041 ***
	(5.44)	(5.45)	(5.45)	(5.46)
CASH	0.227 ***	0.227 ***	0.227 ***	0.227 ***
	(8.49)	(8.48)	(8.50)	(8.50)
CI	−0.006 ***	−0.006 ***	−0.006 ***	−0.006 ***
	(−4.07)	(−4.04)	(−4.13)	(−4.11)
TQ	0.0002	0.0002	0.0002	0.0002
	(0.13)	(0.16)	(0.15)	(0.13)
AGE	0.014 ***	0.014 ***	0.014 ***	0.014 ***
	(6.09)	(6.13)	(6.17)	(6.18)
COMP	−0.003	−0.003	−0.003	−0.003
	(−1.24)	(−1.22)	(−1.21)	(−1.21)
PC	0.005 *	0.005 *	0.005 *	0.005 *
	(1.70)	(1.68)	(1.73)	(1.71)
DUAL	−0.003	−0.003	−0.003	−0.003
	(−1.04)	(−1.04)	(−1.03)	(−1.04)
BOARD	−0.0004	0.0004	−0.0002	−0.0002
	(−0.04)	(0.04)	(−0.02)	(−0.01)
INDEP	0.001	0.001	0.001	0.002
	(0.03)	(0.03)	(0.03)	(0.06)
CONSTANT	−0.072	−0.074	−0.074	−0.074
	(−1.48)	(−1.51)	(−1.51)	(−1.52)
YEAR F.E.	YES	YES	YES	YES
IND F.E.	YES	YES	YES	YES
N	14,182	14,182	14,182	14,182
R2	0.287	0.287	0.288	0.288
adj. R2	0.284	0.284	0.284	0.284

Note: The t-statistics are reported in parentheses on robust standard errors clustered at the firm level. *, **, and *** designate statistical significance at the 10%, 5%, and 1% levels, respectively.

reports the regression results of the impact of state-owned capital participation on private enterprises’ carbon emission reduction. Based on the Hausman test results (Prob > chi2 = 0.0000), a fixed-effects model is more suitable for the analysis in this study. Therefore, the subsequent empirical analysis utilizes a fixed-effects model for regression testing to control for time-invariant individual heterogeneity and temporal trends. Column (1) demonstrates a statistically significant positive relationship between STATETS and CERID (β = 0.013, p < 0.05), indicating that when state-owned capital participates in green governance as a major shareholder, it can better promote the green development of private enterprises. Column (2) also reveals a statistically significant positive relationship between STATEB and CERID (β = 0.002, p < 0.05), indicating that the stronger the counterbalancing ability of state-owned capital, the more it tends to drive the enterprise’s carbon emission reduction efforts. Column (3) demonstrates a significant positive association between STATE_D and CERID (β = 0.100, p < 0.01), suggesting that the higher the proportion of the board seats acquired by the state-owned capital, the more the state-owned capital has the right to speak in green decision-making and the more likely it is to reduce carbon emissions in consideration of the enterprise’s environmental benefits. Column (4) reveals a significant positive correlation between STATE_DJG and CERID (β = 0.163, p < 0.01), illustrating that the higher the proportion of state-owned capital appointed directors, supervisors, and executives, the more obvious the driving effect on carbon emission reduction of private enterprises. Collectively, these findings support Hypothesis H1.

4.4. Robustness Tests

The benchmark regression results demonstrate a significant positive impact of state-owned capital participation on carbon emission reduction in private enterprises, providing initial support for core Hypothesis H1. However, these findings may be influenced by potential endogeneity issues and require further robustness verification. We therefore address endogeneity issues using methods including the Treatment Effects Model and Propensity Score Matching. Additionally, we conduct comprehensive robustness checks, including controlling for regional fixed effects, substituting core variable measurements, and altering the interval range of sample sizes to systematically validate the reliability of benchmark conclusions.

4.4.1. Treatment Effects Model

Drawing on the research by Zhai, Fan and Mu [41], we employ a treatment effects model to address the self-selection bias that may arise from unobservable firm characteristics influencing state-owned capital participation. By introducing instrumental variables to satisfy exogeneity conditions and utilizing the inverse Mills ratio (IMR) to control for sample selection effects, we more reliably identify the impact of state-owned capital participation on carbon emission reduction in private enterprises. Firstly, we adopt the ratio of the number of state-owned listed firms to the total number of listed firms in each province (SOERATIO) [87] as an instrumental variable for the degree of state-owned capital participation. This ratio reflects regional state-sector density, which increases the probability of state-owned participation in private enterprises through geographic proximity. Moreover, this ratio is not closely related to the promotion of carbon emission reduction, which meets the requirements of exogeneity and relevance for instrumental variables. Secondly, the IMR is added into the benchmark model for re-regression.

Table 5. Treatment effects model.

	(1)	(2)
	STATETS	CERID
SOERATIO	1.064 ***
	(7.91)
STATETS		0.201 **
		(2.29)
IMR		−0.0840 **
		(−2.17)
CONSTANT		−0.078
		(−1.60)
CONTROLS	YES	YES
YEAR F.E.	YES	YES
IND F.E.	YES	YES
N	14,182	14,182
Pseudo. R2/adj. R2	0.114	0.284

Note: The t-statistics are reported in parentheses on robust standard errors clustered at the firm level. **, and *** designate statistical significance at the 5%, and 1% levels, respectively.

shows the regression results of the treatment effect model. Column (1) shows that the coefficient of SOERATIO is significantly positive at the 1% level, indicating that there is a significant positive relationship between SOERATIO and STATETS. The IMR in column (2) is significantly negative at the 5% level, suggesting the presence of self-selection issues in this study. However, after controlling for self-selection bias, the regression coefficient of STATETS is significantly positive, and the results of this study remain robust.

4.4.2. Propensity Score Matching

To address potential sample selection bias between state-owned capital participation and carbon emission reduction in private enterprises, this study adopts the propensity score matching (PSM) method of Wei, Mao and Wang [32]. By matching observable characteristics to construct a counterfactual control group, we simulate a randomized experimental environment. This approach ensures that the treatment group and control group exhibit similar pre-participation characteristics, thus minimizing interference from selection bias in the results. Firstly, all control variables in model (1) serve as the paired variables, and the samples are stratified into groups based on the mean value of the counterbalance degree of state-owned capital. Firms with STATEB exceeding the mean are designated as the state-owned capital high-participation group (treatment group), while the remainder constitute the low-participation group (control group). Secondly, caliper matching with a radius of 0.05 is used for propensity score matching, resulting in a total of 9409 matched samples.

Table 6. Propensity score matching.

	(1)	(2)	(3)	(4)
	CERID	CERID	CERID	CERID
STATETS	0.017 **
	(2.48)
STATEB		0.004 ***
		(2.91)
STATE_D			0.101 ***
			(3.09)
STATE_DJG				0.188 ***
				(3.24)
CONSTANT	0.027	0.026	0.024	0.024
	(0.38)	(0.38)	(0.35)	(0.35)
CONTROLS	YES	YES	YES	YES
YEAR F.E.	YES	YES	YES	YES
IND F.E.	YES	YES	YES	YES
N	9409	9409	9409	9409
R2	0.342	0.342	0.342	0.342
adj. R2	0.338	0.337	0.338	0.338

Note: The t-statistics are reported in parentheses on robust standard errors clustered at the firm level. **, and *** designate statistical significance at the 5%, and 1% levels, respectively.

presents the regression results after matching. It can be seen that STATETS, STATEB, STATE_D, and STATE_DJG are significantly and positively related to CERID, indicating that after mitigating the sample selection bias, the regression results remain consistent with the baseline findings.

Meanwhile, to overcome the limitations of the PSM method, this paper further employs the entropy balancing method. By generating specific weights to adjust sample observations through weighting, it achieves balanced sample moments of covariates between the weighted control group and the treatment group, thereby maximizing matching precision between the two sample groups. Similarly, this paper selects control variables as covariates to perform entropy balancing matching for both sample groups. According to the matching results in

Table 7. Entropy matching results.

Variable	Treat	Control		Treat	Control		Treat	Control		Standard Deviations Before Matching	Standard Deviations After Matching
	Mean	Before	After	Variance	Before	After	Skewness	Before	After
SIZE	22.577	22.412	22.577	0.941	0.795	0.941	0.681	0.834	0.680	0.170	0.000
LEV	0.394	0.360	0.394	0.034	0.031	0.034	0.193	0.308	0.193	0.183	0.000
GROWTH	0.168	0.173	0.168	0.126	0.109	0.126	2.269	2.025	2.269	−0.014	0.000
CASH	0.044	0.053	0.044	0.004	0.004	0.004	−0.037	0.099	−0.037	−0.133	0.000
CI	2.417	2.171	2.417	2.739	1.846	2.739	2.478	2.688	2.478	0.148	0.000
TQ	2.212	2.158	2.212	1.828	1.652	1.828	2.750	2.953	2.750	0.040	0.000
AGE	2.096	1.779	2.096	0.551	0.486	0.551	−0.376	0.099	−0.376	0.427	0.000
COMP	5.282	5.182	5.282	0.585	0.500	0.585	0.028	0.098	0.027	0.131	0.000
PC	0.336	0.315	0.336	0.223	0.216	0.223	0.693	0.797	0.693	0.045	0.000
DUAL	0.347	0.411	0.347	0.227	0.242	0.227	0.642	0.363	0.642	−0.133	0.000
BOARD	2.126	2.072	2.126	0.029	0.034	0.029	−0.944	−0.729	−0.944	0.310	0.000

, there are no significant differences in the mean, variance, or skewness of covariates between the two groups of samples after matching.

Table 8. Entropy balancing method.

	(1)	(2)	(3)	(4)
	CERID	CERID	CERID	CERID
STATETS	0.012 *
	(1.82)
STATEB		0.003 **
		(2.22)
STATE_D			0.093 **
			(2.54)
STATE_DJG				0.141 **
				(2.18)
CONSTANT	−0.095	−0.095	−0.098 *	−0.099 *
	(−1.62)	(−1.64)	(−1.68)	(−1.69)
CONTROLS	YES	YES	YES	YES
YEAR F.E.	YES	YES	YES	YES
IND F.E.	YES	YES	YES	YES
N	14,182	14,182	14,182	14,182
R2	0.295	0.295	0.296	0.296
adj. R2	0.292	0.292	0.293	0.293

Note: The t-statistics are reported in parentheses on robust standard errors clustered at the firm level. *, and ** designate statistical significance at the 10%, and 5% levels, respectively.

presents the regression results after entropy balancing matching, which shows that state-owned capital participation continues to have a significant positive impact on carbon emission reduction in private enterprises, demonstrating the reliability of the benchmark regression estimates.

4.4.3. Controlling for Regional Fixed Effects

In the baseline regression process, this paper controls for year and industry fixed effects. However, due to distinctions in market environments, regulatory policies, industrial structures, and environmental pollution across various regions, the pollution reduction and carbon emission behaviors of enterprises also differ. Following the studies by Li, et al. [88] and Liu and Li [89], we further incorporate province fixed effects into model (1) to alleviate potential factors at the regional level that affect the relationship between state-owned capital participation and carbon emission reduction in private enterprises. The re-regression results are shown in

Table 9. Control regional fixed effects.

	(1)	(2)	(3)	(4)
	CERID	CERID	CERID	CERID
STATETS	0.013 **
	(1.98)
STATEB		0.002 *
		(1.81)
STATE_D			0.100 ***
			(2.64)
STATE_DJG				0.155 **
				(2.43)
CONSTANT	−0.067	−0.068	−0.069	−0.069
	(−1.36)	(−1.38)	(−1.39)	(−1.40)
CONTROLS	YES	YES	YES	YES
YEAR F.E.	YES	YES	YES	YES
IND F.E.	YES	YES	YES	YES
PROVINCE F.E.	YES	YES	YES	YES
N	14,182	14,182	14,182	14,182
R2	0.288	0.288	0.289	0.289
adj. R2	0.284	0.284	0.284	0.284

Note: The t-statistics are reported in parentheses on robust standard errors clustered at the firm level. *, **, and *** designate statistical significance at the 10%, 5%, and 1% levels, respectively.

. The four proxy variables for state-owned capital participation continue to show significant positive associations with private enterprises’ carbon emission reduction, demonstrating the robustness of our findings after accounting for industry, year, and province fixed effects.

4.4.4. Alternative Measure of the Explained Variable

To mitigate potential concerns regarding the influence of indicator selection, we employ an alternative measure for the carbon emission reduction effect. Specifically, we use the reduction in carbon emissions (CERQD) as the measure, with the specific formula being: (CO₂ emissions in year t − 1 − CO₂ emissions in year t)/CO₂ emissions in year t − 1.

Table 10. Alternative measure of the explained variable.

	(1)	(2)	(3)	(4)
	CERQD	CERQD	CERQD	CERQD
STATETS	0.031 ***
	(3.45)
STATEB		0.004 *
		(1.91)
STATE_D			0.126 **
			(2.46)
STATE_DJG				0.263 ***
				(3.14)
CONSTANT	0.084	0.082	0.082	0.081
	(1.05)	(1.01)	(1.01)	(1.00)
CONTROLS	YES	YES	YES	YES
YEAR F.E.	YES	YES	YES	YES
IND F.E.	YES	YES	YES	YES
N	14,182	14,182	14,182	14,182
R2	0.632	0.632	0.632	0.632
adj. R2	0.630	0.630	0.630	0.630

Note: The t-statistics are reported in parentheses on robust standard errors clustered at the firm level. *, **, and *** designate statistical significance at the 10%, 5%, and 1% levels, respectively.

reports the results using this alternative measure, showing that STATETS, STATEB, STATE_D, and STATE_DJG are significantly positively correlated with CERQD, indicating a positive impact on CO₂ emission reduction. These findings confirm the robustness of our core conclusions.

4.4.5. Alternative Measures of Explanatory Variables

Drawing on Xiao, et al. [90], this paper adopts the participation of state-owned major shareholders among the top ten shareholders of private enterprises (dummy variable; if the sum of the proportion of state-owned equity holdings among the top ten shareholders exceeds 10%, it takes 1; otherwise, it takes 0) to re-measure the degree of state-owned capital participation (STATETS1). Referring to Sang and Li [91], the ratio of the state-owned shareholder’s holding proportion to the private shareholder’s holding proportion among the top ten shareholders is used to re-measure the counterbalance degree of state-owned capital (STATEB1). Following the approach of Wang, Liu and Liu [57], dummy variables indicating whether state-owned capital appoints directors and whether it appoints directors, supervisors, and executives serve as alternative measures for the degree of state-owned capital director governance (STATED_ DUM) and the degree of state-owned capital director, executive, and supervisor governance (STATEDJG_DUM). The test results are shown in

Table 11. Alternative measures of explanatory variables.

	(1)	(2)	(3)	(4)
	CERID	CERID	CERID	CERID
STATETS10	0.013 **
	(2.13)
STATEB2		0.001 *
		(1.77)
STATED_DUM			0.023 ***
			(2.67)
STATEDJG_DUM				0.020 ***
				(2.66)
CONSTANT	−0.0730	−0.0732	−0.0740	−0.0744
	(−1.49)	(−1.50)	(−1.52)	(−1.52)
CONTROLS	YES	YES	YES	YES
YEAR F.E.	YES	YES	YES	YES
IND F.E.	YES	YES	YES	YES
N	14,182	14,182	14,182	14,182
R2	0.287	0.287	0.288	0.287
adj. R2	0.284	0.284	0.284	0.284

Note: The t-statistics are reported in parentheses on robust standard errors clustered at the firm level. *, **, and *** designate statistical significance at the 10%, 5%, and 1% levels, respectively.

. There is a significant positive correlation between STATETS1, STATEB1, STATED_ DUM, STATEDJG_DUM, and CERID, and the results are consistent with the above.

4.4.6. Altering the Interval Range of Sample Sizes

Taking into account the impact of the COVID-19 pandemic on business operations and green governance, following the research by Dou, et al. [92], data from 2020 to 2022 are excluded, and a re-regression is conducted only on data prior to 2019. The specific regression results can be seen in

Table 12. Alter the interval range of sample sizes.

	(1)	(2)	(3)	(4)
	CERID	CERID	CERID	CERID
STATETS	0.023 ***
	(2.61)
STATEB		0.0033 **
		(2.19)
STATE_D			0.085 **
			(2.14)
STATE_DJG				0.133 **
				(1.97)
CONSTANT	−0.023	−0.025	−0.025	−0.025
	(−0.32)	(−0.34)	(−0.34)	(−0.34)
CONTROLS	YES	YES	YES	YES
YEAR F.E.	YES	YES	YES	YES
IND F.E.	YES	YES	YES	YES
N	9169	9169	9169	9169
R2	0.326	0.325	0.326	0.326
adj. R2	0.321	0.321	0.321	0.321

Note: The t-statistics are reported in parentheses on robust standard errors clustered at the firm level. **, and *** designate statistical significance at the 5%, and 1% levels, respectively.

. The results indicate that after eliminating the impact of the COVID-19 pandemic, state-owned capital participation still has a significant positive effect on the carbon emission reduction of private enterprises. This further confirms the robustness of our findings, mitigating concerns about the influence of this significant external shock.

5. Mechanism Tests

The above results demonstrate that state-owned capital participation directly facilitates carbon emission reduction in private enterprises. Building on this evidence, we delve into the specific pathways mediating this effect. This involves dissecting the underlying logic of how state-owned capital participation drives corporate carbon emission reduction through three mechanisms, namely, resource base, value recognition, and energy efficiency, thereby revealing the operative mechanisms behind the benchmark findings. This paper constructs a mediation effect model to test the possible mechanism [93], primarily conducted in three steps. Firstly, the influence of state-owned capital participation on the carbon emission reduction effect of private enterprises is examined using Equation (1). Secondly, the influence of state-owned capital participation on the mediating variables is examined using Equations (2), (4), and (6). Thirdly, the influence of state-owned capital on carbon emission reduction after incorporating the mediating variables is examined using Equations (3), (5), and (7), respectively.

5.1. Resource Base

To test whether state-owned capital participation facilitates access to green resources for private enterprises to promote carbon emission reduction, this paper draws on the study by Yu, et al. [94] and constructs models (2) and (3) to examine the mediating role of the government environmental subsidies:

$${GS}_{i,t}={\beta }_0+{\beta }_1{DSOE}_{i,t}+{\beta }_2{CONTROLS}_{i,t}+{\eta }_{YEAR}+{\eta }_{IND}+{\epsilon }_{i,t}$$

(2)

$${CERID}_{i,t}={\gamma }_0+{\gamma }_1{DSOE}_{i,t}+{\gamma }_2{GS}_{i,t}+{\gamma }_3{CONTROLS}_{i,t}+{\eta }_{YEAR}+{\eta }_{IND}+{\epsilon }_{i,t}$$

(3)

where GS stands for government environmental subsidies, measured as the ratio of total government environmental subsidies to the firm’s total assets, following Li and Xiao [95] and Yu [96]. Government environmental subsidies are manually collected from the detailed items of “government subsidies” in the annual report notes, based on keywords related to environmental protection, to determine the amounts of environmental subsidies each enterprise receives from the government annually. The larger the value of GS, the more the enterprise receives the environmental subsidy from the government.

Table 13. Resource-based mechanism test.

	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)	(11)	(12)
	CERID	GS	CERID	CERID	GS	CERID	CERID	GS	CERID	CERID	GS	CERID
STATETS	0.013 **	0.040 **	0.012 *
	(2.03)	(2.01)	(1.89)
STATEB				0.002 **	0.023 **	0.002 *
				(2.02)	(2.40)	(1.66)
STATE_D							0.100 ***	0.312 **	0.094 **
							(2.75)	(2.09)	(2.56)
STATE_DJG										0.163 ***	0.443 **	0.154 **
										(2.62)	(2.17)	(2.47)
GS			0.020 ***			0.020 ***			0.019 ***			0.020 ***
			(2.75)			(2.80)			(2.65)			(2.70)
CONSTANT	−0.0723	0.211 *	−0.0765	−0.0735	0.205 *	−0.0776	−0.0737	0.206 *	−0.0777	−0.0740	0.206 *	−0.0780
	(−1.48)	(1.77)	(−1.56)	(−1.51)	(1.72)	(−1.58)	(−1.51)	(1.73)	(−1.58)	(−1.52)	(1.73)	(−1.59)
YEAR F.E.	YES	YES	YES	YES	YES	YES	YES	YES	YES	YES	YES	YES
IND F.E.	YES	YES	YES	YES	YES	YES	YES	YES	YES	YES	YES	YES
N	14,182	14,182	14,182	14,182	14,182	14,182	14,182	14,182	14,182	14,182	14,182	14,182
R2	0.287	0.021	0.288	0.287	0.022	0.288	0.288	0.022	0.288	0.288	0.022	0.288
adj. R2	0.284	0.017	0.285	0.284	0.017	0.285	0.284	0.018	0.285	0.284	0.017	0.285
Sobel Test	2.471 (p = 0.013)			2.736 (p = 0.006)			2.869 (p = 0.004)			2.706 (p = 0.007)

Note: The t-statistics are reported in parentheses on robust standard errors clustered at the firm level. *, **, and *** designate statistical significance at the 10%, 5%, and 1% levels, respectively.

reports the results of testing the resource-based mechanism. Columns (2), (5), (8), and (11) demonstrate that STATETS, STATEB, STATE_D, and STATE_DJG exhibit significant positive associations with government environmental subsidies (GSs) received by private enterprises. This indicates that after state-owned capital holds shares or appoints directors in private enterprises, it enhances the government’s environmental subsidies they receive. Columns (3), (6), (9), and (12) reveal that after controlling for government environmental subsidies, STATETS, STATEB, STATE_D, and STATE_DJG remain significantly and positively associated with CERID, albeit with reduced significance levels, suggesting government environmental subsidies exhibit a partial mediating effect in the relationship between state-owned capital participation and carbon emission reduction. Thus, state-owned capital participation facilitates access to government green resources for private enterprises, supporting low-carbon technology development and carbon emission reduction.

5.2. Value Recognition

To examine whether state-owned capital participation motivates private enterprises to reduce pollution and carbon emissions by increasing their alignment with government objectives, this paper constructs models (4) and (5) to test the mediating role of environmental social responsibility:

$${ESG}_{i,t}={\beta }_0+{\beta }_1{DSOE}_{i,t}+{\beta }_2{CONTROLS}_{i,t}+{\eta }_{YEAR}+{\eta }_{IND}+{\epsilon }_{i,t}$$

(4)

$${CERID}_{i,t}={\gamma }_0+{\gamma }_1{DSOE}_{i,t}+{\gamma }_2{ESG}_{i,t}+{\gamma }_3{CONTROLS}_{i,t}+{\eta }_{YEAR}+{\eta }_{IND}+{\epsilon }_{i,t}$$

(5)

where ESG stands for environmental social responsibility. This paper employs the ESG rating from the CNRDS database as the measure. The ESG rating selects 39 indicators across the dimensions of environment, society, and governance for a comprehensive assessment and calculates the ESG score. A higher ESG rating indicates a stronger corporate commitment to governmental environmental objectives, reflecting a balanced approach to ecological protection, social responsibility fulfillment, and internal governance improvement.

Table 14. Value recognition mechanism test.

	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)	(11)	(12)
	CERID	ESG	CERID	CERID	ESG	CERID	CERID	ESG	CERID	CERID	ESG	CERID
STATETS	0.013 **	2.211 ***	0.012 *
	(2.03)	(2.80)	(1.88)
STATEB				0.002 **	0.63 ***	0.002 *
				(2.02)	(2.89)	(1.80)
STATE_D							0.100 ***	7.185 *	0.097 ***
							(2.75)	(1.92)	(2.68)
STATE_DJG										0.163 ***	14.01 **	0.157 **
										(2.62)	(2.05)	(2.50)
ESG			0.0004 **			0.0004 **			0.0004 **			0.0004 **
			(2.06)			(2.11)			(2.06)			(2.06)
CONSTANT	−0.072	7.049	−0.075	−0.074	6.810	−0.076	−0.074	6.865	−0.077	−0.074	6.832	−0.077
	(−1.48)	(1.64)	(−1.54)	(−1.51)	(1.58)	(−1.57)	(−1.51)	(1.59)	(−1.57)	(−1.52)	(1.59)	(−1.58)
YEAR F.E.	YES	YES	YES	YES	YES	YES	YES	YES	YES	YES	YES	YES
IND F.E.	YES	YES	YES	YES	YES	YES	YES	YES	YES	YES	YES	YES
N	14,182	14,182	14,182	14,182	14,182	14,182	14,182	14,182	14,182	14,182	14,182	14,182
R2	0.287	0.508	0.288	0.287	0.507	0.288	0.288	0.507	0.288	0.288	0.507	0.288
adj. R2	0.284	0.505	0.284	0.284	0.505	0.284	0.284	0.505	0.285	0.284	0.505	0.285
Sobel Test	−3.553 (p = 0.000)			−2.701 (p = 0.007)			−2.508 (p = 0.012)			−2.226 (p = 0.026)

Note: The t-statistics are reported in parentheses on robust standard errors clustered at the firm level. *, **, and *** designate statistical significance at the 10%, 5%, and 1% levels, respectively.

reports the results of testing the value recognition mechanism. Columns (2), (5), (8), and (11) show that STATETS, STATEB, STATE_D, and STATE_DJG are all significantly positively related to ESG performance, suggesting that state-owned capital participation indeed contributes to private enterprises’ ESG performance. Columns (3), (6), (9), and (12) show that after controlling for ESG ratings, STATETS, STATEB, STATE_D, and STATE_DJG remain significantly and positively associated with CERID of private enterprises, and the coefficients and significance levels are reduced, indicating that ESG performance plays a partly mediating role. This indicates that state-owned capital participation has strengthened private enterprises’ value recognition of the government’s environmental protection goals, promoting the active fulfillment of environmental social responsibilities, thereby facilitating a reduction in carbon emissions by these enterprises.

5.3. Energy Efficiency

To examine whether state-owned capital participation promotes carbon emission reduction in private enterprises by enhancing energy utilization efficiency, this paper constructs models (6) and (7) to assess the mediating role of total factor productivity:

$${TFP}_{i,t}={\beta }_0+{\beta }_1{DSOE}_{i,t}+{\beta }_2{CONTROLS}_{i,t}+{\eta }_{YEAR}+{\eta }_{IND}+{\epsilon }_{i,t}$$

(6)

$${CERID}_{i,t}={\gamma }_0+{\gamma }_1{DSOE}_{i,t}+{\gamma }_2{TFP}_{i,t}+{\gamma }_3{CONTROLS}_{i,t}+{\eta }_{YEAR}+{\eta }_{IND}+{\epsilon }_{i,t}$$

(7)

where TFP stands for total factor productivity, serving as a measure of the energy utilization efficiency of enterprises. Due to the long time span of the research sample, drawing on Lu and Lian [97], the GMM method is used to estimate the total factor productivity of the enterprises, avoiding the endogeneity problem. A higher TFP value indicates that a firm consumes less energy for the same output level, resulting in lower carbon emissions, ceteris paribus.

Table 15. Energy efficiency mechanism test.

	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)	(11)	(12)
	CERID	TFP_GMM	CERID	CERID	TFP_GMM	CERID	CERID	TFP_GMM	CERID	CERID	TFP_GMM	CERID
STATETS	0.013 **	0.046	0.012 *
	(2.03)	(1.39)	(1.89)
STATEB				0.002 **	0.010	0.002 **
				(2.02)	(1.49)	(1.97)
STATE_D							0.100 ***	0.418 **	0.097 ***
							(2.75)	(2.39)	(2.69)
STATE_DJG										0.163 ***	0.743 **	0.156 **
										(2.62)	(2.36)	(2.56)
TFP_GMM			0.008 **			0.008 **			0.008 **			0.008 **
			(2.08)			(2.10)			(2.01)			(2.02)
CONSTANT	−0.072	−0.787 ***	−0.065	−0.0735	−0.791 ***	−0.066	−0.074	−0.792 ***	−0.066	−0.074	−0.794 ***	−0.067
	(−1.48)	(−3.41)	(−1.33)	(−1.51)	(−3.43)	(−1.35)	(−1.51)	(−3.44)	(−1.36)	(−1.52)	(−3.44)	(−1.36)
YEAR F.E.	YES	YES	YES	YES	YES	YES	YES	YES	YES	YES	YES	YES
IND F.E.	YES	YES	YES	YES	YES	YES	YES	YES	YES	YES	YES	YES
N	14,182	14,147	14,147	14,182	14,147	14,147	14,182	14,147	14,147	14,182	14,147	14,147
R2	0.287	0.618	0.288	0.287	0.617	0.288	0.288	0.618	0.288	0.288	0.618	0.288
adj. R2	0.284	0.616	0.285	0.284	0.616	0.285	0.284	0.616	0.285	0.284	0.616	0.285
Sobel Test	−1.176 (p = 0.240)			−0.521 (p = 0.601)			−2.911 (p = 0.004)			−2.805 (p = 0.005)

Note: The t-statistics are reported in parentheses on robust standard errors clustered at the firm level. *, **, and *** designate statistical significance at the 10%, 5%, and 1% levels, respectively.

reports the results of testing the energy utilization efficiency mechanism. Columns (8) and (11) show that both STATE_D and STATE_DJG are significantly positively related to the total factor productivity (TFP) of private enterprises, indicating that state-owned capital participation in top-level governance dimensions can increase the input–output ratio and enhance the energy utilization efficiency. Columns (9) and (12) show that after controlling for total factor productivity, STATE_D and STATE_DJG are still significantly positively correlated with the private enterprises’ carbon emission reduction, with the regression coefficients decreasing from 0.100 and 0.163 to 0.097 and 0.156, suggesting that total factor productivity plays a partly mediating role. Columns (2) and (4) show that the regression coefficients ${\beta }_1$ of STATETS and STATEB are statistically insignificant, indicating no significant association with total factor productivity (TFP). At this point, a Sobel test is conducted. The Sobel Z statistics are −1.176 and −0.521, with corresponding p-values of 0.240 and 0.601, indicating that total factor productivity does not play a mediating role in the relationship between state-owned capital participation and carbon emission reduction at the equity governance level. This may be due to the fact that state-owned capital cannot directly enhance productivity in private enterprises solely through shareholding; rather, directors, supervisors, and executives must be appointed to participate in governance, promoting technological progress and rational allocation of resources, thereby increasing energy utilization efficiency and reducing carbon emissions. This finding further empirically substantiates the necessity for state-owned capital to not only hold equity stakes but also actively appoint personnel in private enterprises to secure substantive control and decision-making authority.

Given the above evidence, it can be observed that at the equity governance dimension, STATETS and STATEB primarily exert influence through the resource base and value recognition pathways. Private enterprises alleviate resource constraints by accessing environmental subsidies, while the presence of state shareholders representing the government reinforces corporate value recognition toward environmental social responsibilities. However, constrained by the absence of governance, their impact on improving energy utilization efficiency remains limited. At the top-level governance dimension, STATE_D and STATE_DJG influence carbon emission reduction through resource base, value recognition, and energy efficiency mechanisms. Beyond delivering substantial resources, personnel appointed by state-owned capital internalize government environmental objectives within enterprises. Critically, they enhance energy efficiency by optimizing production processes, thereby accelerating the transition toward low-carbon operations.

6. Heterogeneity Analysis

Based on the established findings confirming the existence and underlying mechanisms of the state-owned capital participation effect on carbon emission reduction, this section employs heterogeneity analysis to investigate the specific conditions under which this effect is amplified or attenuated. Accordingly, we select four dimensions, namely, government environmental regulation, the degree of marketization, the degree of industry competition, and green financing constraints, for analysis. The selection of these four dimensions is primarily grounded in the following reasons. Government environmental regulations reflect the constraining intensity of external policy pressure on enterprise emission reduction behaviors, constituting macro-level institutional conditions that fundamentally govern the effectiveness of state-owned capital participation. The degree of marketization embodies regional resource allocation efficiency and institutional maturity, moderating the emission reduction effect of state-owned capital through policy implementation and market mechanisms. The degree of industry competition correlates with enterprises’ strategic choices and survival pressures within their sector, determining the market-driven incentive strength for state-owned capital to promote carbon emission reduction. Green financing constraints directly reflect the barriers to resource availability in private enterprises’ emission reduction processes and are key conditions affecting the role of state-owned capital in resource supply. These four variables comprehensively encompass critical contextual factors spanning macro-institutions, the market environment, industry characteristics, and enterprise resources, jointly providing a comprehensive perspective for revealing the boundary conditions of the emission reduction effect of state-owned capital participation in private enterprises.

6.1. Government Environmental Regulation

Given the differences in resource endowments and economic growth rates across regions, government environmental regulation intensity varies regionally. In the external development environment of private enterprises, the level of government environmental regulation in their respective regions may directly affect the relationship between state-owned capital participation and enterprise carbon emission reduction. Firstly, in regions with greater government environmental regulation, the government pays more attention to the green governance of enterprises and has stricter requirements for reducing carbon emissions [57]. Driven by the government’s regulatory pressure, private enterprises always actively develop green innovation activities to meet the government’s environmental governance requirements in a lasting and cost-effective way.

As Chen, et al. [98] demonstrated, environmental regulation exerts coercive pressure that effectively limits carbon emissions. Therefore, due to the more effective green production within private enterprises, the promotion effect of state-owned capital participation on private enterprises’ carbon emission reduction is less obvious. Secondly, in regions with poor government environmental regulation, the environmental governance of the region and the performance of private enterprises in reducing pollution and carbon emissions are relatively insufficient due to the lack of strict environmental governance concerns and requirements from the government [99]. After the participation of state-owned capital, private enterprises gain governmental green resource support, recognize low-carbon development value, and enhance motivation and capacity for emission reduction. Thus, in regions with a lower level of government environmental regulation, state-owned capital participation exerts a more pronounced positive impact on private enterprises’ carbon emission reduction.

Regarding the intensity of environmental regulation, this paper draws on the research by Hu, Fang and Long [70] and Tang [99], using the ratio of completed industrial pollution control investment to secondary industry value-added in the province where the listed company is registered (ER) as a measure. Based on the median value, the sample is divided into a group with higher environmental regulation and a group with lower environmental regulation.

Table 16. The group inspection results of government environmental regulation.

	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
	Higher	Lower	Higher	Lower	Higher	Lower	Higher	Lower
STATETS	0.005	0.024 **
	(0.53)	(2.30)
STATEB			0.002	0.024 *
			(1.05)	(1.67)
STATE_D					0.047	0.156 ***
					(0.93)	(3.14)
STATE_DJG							0.070	0.283 ***
							(0.75)	(3.06)
CONSTANT	−0.13	−0.026	−0.130	−0.029	−0.129	−0.033	−0.129	−0.033
	(−1.53)	(−0.43)	(−1.53)	(−0.47)	(−1.52)	(−0.54)	(−1.52)	(−0.55)
CONTROLS	YES	YES	YES	YES	YES	YES	YES	YES
YEAR F.E.	YES	YES	YES	YES	YES	YES	YES	YES
IND F.E.	YES	YES	YES	YES	YES	YES	YES	YES
N	7084	7098	7084	7098	7084	7098	7084	7098
R2	0.278	0.327	0.278	0.326	0.278	0.327	0.278	0.327
adj. R2	0.272	0.321	0.272	0.321	0.272	0.321	0.272	0.321
Inter-group difference test	0.019 *** (p = 0.000)		0.023 *** (p = 0.000)		0.109 *** (p = 0.000)		0.213 *** (p = 0.000)

Note: The t-statistics are reported in parentheses on robust standard errors clustered at the firm level. *, **, and *** designate statistical significance at the 10%, 5%, and 1% levels, respectively.

reports the regression results of the government environmental regulation grouping, which suggests that only when private enterprises face lower environmental regulation, STATETS, STATEB, STATE_D, and STATE_DJG are positively correlated with CERID of private enterprises, and all pass the inter-group coefficient difference test. This indicates that the external development environment determines the degree of the impact of state-owned capital participation on the green governance activities of private enterprises.

6.2. The Degree of Marketization

Marketization acts as a mechanism that restrains and supplants government intervention. An increase in the degree of regional marketization signals a reduction in government intervention, with resource allocation and environmental governance relying more on market mechanisms and achieving higher resource utilization efficiency [100]. Firstly, in regions with a higher degree of marketization, characterized by more developed market mechanisms and institutional constructions, private enterprises are more inclined to leverage the market environment to attain green resources and implement carbon emission reduction activities. Secondly, under such circumstances, the resource allocation efficiency of the enterprise is relatively high [101], enabling it to allocate resources to research and development of low-carbon technology and green production and improve energy efficiency, thus facilitating carbon emission reduction. The resource base and efficiency enhancement brought by the participation of state-owned capital are replaced and weakened by the marketization process; thus, they cannot have a significant impact on the carbon emission reduction of enterprises. Conversely, in regions with a lower marketization degree, market mechanisms and legal institutions are less developed, requiring improvement, and the transparency of information disclosure is also lower. Under these conditions, where the government assumes a dominant role in fostering green development, private enterprises tend to view state-owned equity, representing the government, as a substitute for “institutional protection” [102]. State-owned equity participation prompts private enterprises to prioritize government-promoted environmental objectives, enhance green information disclosure levels, increase environmental protection investment, and advance pollution and emission reduction. Therefore, when the marketization degree of the region is low, the promotion effect of state-owned capital participation on corporate carbon emission reduction is more pronounced.

Regarding the marketization degree, this paper draws on Wang, et al. [103] and uses the marketization index to measure it. Using the median of the index as a benchmark, the sample is classified into a higher-marketization group and a lower-marketization group.

Table 17. The group inspection results of the marketization degree.

	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
	Higher	Lower	Higher	Lower	Higher	Lower	Higher	Lower
STATETS	−0.012	0.027 ***
	(−1.02)	(3.37)
STATEB			−0.025	0.003 *
			(−1.33)	(1.69)
STATE_D					−0.007	0.145 ***
					(−0.12)	(3.51)
STATE_DJG							−0.033	0.249 ***
							(−0.33)	(3.55)
CONSTANT	−0.093	−0.063	−0.092	−0.062	−0.091	−0.062	−0.091	−0.061
	(−1.50)	(−0.77)	(−1.49)	(−0.76)	(−1.47)	(−0.76)	(−1.47)	(−0.75)
CONTROLS	YES	YES	YES	YES	YES	YES	YES	YES
YEAR F.E.	YES	YES	YES	YES	YES	YES	YES	YES
IND F.E.	YES	YES	YES	YES	YES	YES	YES	YES
N	7110	7072	7110	7072	7110	7072	7110	7072
R2	0.364	0.264	0.364	0.264	0.363	0.264	0.363	0.264
adj. R2	0.358	0.258	0.358	0.257	0.358	0.258	0.358	0.258
Inter-group difference test	0.038 *** (p = 0.000)		0.028 *** (p = 0.000)		0.152 *** (p = 0.000)		0.282 *** (p = 0.000)

Note: The t-statistics are reported in parentheses on robust standard errors clustered at the firm level. *, and *** designate statistical significance at the 10%, and 1% levels, respectively.

reports the regression results of the grouping of the marketization degree. It is shown that when the marketization degree of the province where private enterprises are located is relatively low, STATETS, STATEB, STATE_D, and STATE_DJG exhibit a significant positive correlation with the CERID of the private enterprise. This suggests that in highly developed market environments, private enterprises always maintain the concept and action of pollution reduction and emission reduction, but the effect is not obvious after state-owned capital participation. Conversely, in less developed market environments, state-owned capital participation significantly enhances the impact on corporate carbon emission reduction.

6.3. The Degree of Industry Competition

The competitive environment of an industry is an important factor influencing corporate behavior [104]. Firstly, the fully competitive market environment heightens the risk of market share erosion. To obtain the resource base for improving core competitiveness, enterprises will improve their environmental protection image by actively fulfilling environmental protection and social responsibility and striving for more stakeholders’ attention. Under intense competition, state-owned capital participation motivates private enterprises to reduce pollution and carbon emissions, aiming to gain competitive advantages [32]. Secondly, the higher the degree of industry competition, the more severe the operational difficulties faced by enterprises [105], resulting in a lack of time to pay attention to the environmental benefits of the enterprise. Following shareholding and director appointments, state-owned capital gains an effective voice and governance participation, helping to mitigate operational constraints and enhance private enterprises’ motivation and capacity for green governance activities. Thirdly, in industries with high competition, private enterprises face greater challenges in resource acquisition [106]. State-owned capital participation thus becomes an essential channel for facilitating resource access. Consequently, private enterprises will have a higher level of recognition and implementation of government objectives, driving the enterprises to invest additional green resources into green governance activities and reduce carbon emissions. Conversely, when competition in the industry is low, private enterprises tend to pursue stable operations with lower risk-taking capacity. After obtaining resources brought by state-owned capital participation, private enterprises may be induced to engage in rent-seeking behavior to enhance economic benefits, rather than investing in riskier green governance activities. Thus, the effect of state-owned capital participation in promoting carbon emission reduction is more pronounced in industries characterized by a higher degree of competition.

Regarding the industry competition degree, drawing on the study by Hu, Fang and Long [70], the Lerner index is used for measurement. Based on the median value of this index, the sample is classified into a higher degree of industry competition group and a lower degree of industry competition group.

Table 18. The group inspection results of the degree of industry competition.

	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
	Higher	Lower	Higher	Lower	Higher	Lower	Higher	Lower
STATETS	0.025 **	0.004
	(2.35)	(0.40)
STATEB			0.044 **	0.001
			(2.43)	(0.87)
STATE_D					0.125 ***	0.070
					(2.79)	(1.26)
STATE_DJG							0.214 **	0.098
							(2.54)	(1.16)
CONSTANT	−0.102	0.163 *	−0.104	0.163 *	−0.107 *	0.164 *	−0.107 *	0.163 *
	(−1.60)	(1.90)	(−1.64)	(1.90)	(−1.68)	(1.91)	(−1.68)	(1.90)
CONTROLS	YES	YES	YES	YES	YES	YES	YES	YES
YEAR F.E.	YES	YES	YES	YES	YES	YES	YES	YES
IND F.E.	YES	YES	YES	YES	YES	YES	YES	YES
N	7092	7089	7092	7089	7092	7089	7092	7089
R2	0.332	0.262	0.332	0.262	0.332	0.262	0.332	0.262
adj. R2	0.326	0.256	0.326	0.256	0.326	0.256	0.326	0.256
Inter-group difference test	−0.021 *** (p = 0.000)		−0.043 *** (p = 0.000)		−0.055 ** (p = 0.000)		−0.117 ** (p = 0.000)

Note: The t-statistics are reported in parentheses on robust standard errors clustered at the firm level. *, **, and *** designate statistical significance at the 10%, 5%, and 1% levels, respectively.

reports the regression results of the grouping of the industry competition degree. The results show that when the industry competition degree is high, STATETS, STATEB, STATE_D, and STATE_DJG are significantly and positively correlated with the CERID of the private enterprise. This indicates that when private enterprises operate in high-competition industries, the resource support and efficiency improvement associated with state-owned capital participation encourage them to actively reduce pollution and increase efficiency, shaping their green competitive advantages.

6.4. Green Financing Constraints

Carbon emission reduction, as an essential green governance activity of enterprises, is a holistic change project that requires a large amount of capital investment [57]. The magnitude of green financing constraints is a key factor affecting the willingness and effectiveness of private enterprises in carbon emission reduction. Firstly, when private enterprises face significant green financing constraints, they tend to prioritize operational funding, resulting in insufficient investment in environmental protection [69]. State-owned capital participation brings government environmental protection subsidies to private enterprises, releases favorable support signals to external investors, and enhances investors’ investment confidence and willingness. This facilitates private enterprises in securing ample green funds through multiple channels and alleviates green financing constraints, thereby supporting corporate carbon emission reduction efforts. Secondly, private enterprises with more severe green financing constraints often experience information asymmetry with banks and other financial institutions, coupled with lower environmental information disclosure, resulting in higher financing costs [107]. State-owned capital participation enhances private enterprises’ value recognition of green governance, prompts them to actively undertake environmental social responsibility, improves corporate reputation and risk-taking level, reduces information asymmetry between banks and enterprises, and makes it more convenient for enterprises to obtain green financing. Conversely, when green financing constraints are low, obtaining green funds involves lower difficulty and cost. This enables firms to invest surplus funds in low-carbon R&D alongside daily operations, reducing production-related carbon emissions. Under these conditions, resources from state-owned capital participation do not significantly enhance carbon emission reduction. Therefore, the more severe green financing constraints faced by private enterprises, the more significant the effect of state-owned capital participation in promoting carbon emission reduction.

Regarding green financing constraints, drawing on the research by Liu and He [108], this paper uses the green finance index of each prefecture-level city calculated by the entropy method as a measure. The larger the green finance index, the smaller the green financing constraints faced by enterprises. The comprehensive evaluation system of the green finance index is mainly constructed from green credit, green investment, green insurance, green bonds, green support, green funds, and green equity. Based on the median index value, the samples are classified into a higher green financing constraints group and a lower green financing constraints group.

Table 19. The group inspection results of green financing constraints.

	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
	Lower	Higher	Lower	Higher	Lower	Higher	Lower	Higher
STATETS	−0.004	0.027 ***
	(−0.35)	(3.09)
STATEB			−0.021	0.003 *
			(−1.27)	(1.83)
STATE_D					0.042	0.137 ***
					(0.99)	(2.89)
STATE_DJG							0.100	0.198 **
							(1.41)	(2.31)
CONSTANT	−0.134 **	−0.014	−0.135 **	−0.012	−0.134 **	−0.011	−0.134 **	−0.012
	(−2.36)	(−0.15)	(−2.39)	(−0.14)	(−2.35)	(−0.12)	(−2.35)	(−0.13)
CONTROLS	YES	YES	YES	YES	YES	YES	YES	YES
YEAR F.E.	YES	YES	YES	YES	YES	YES	YES	YES
IND F.E.	YES	YES	YES	YES	YES	YES	YES	YES
N	7103	7078	7103	7078	7103	7078	7103	7078
R2	0.362	0.245	0.362	0.245	0.362	0.245	0.362	0.245
adj. R2	0.356	0.238	0.356	0.238	0.356	0.238	0.356	0.238
Inter-group difference test	0.031 *** (p = 0.000)		0.024 *** (p = 0.000)		0.096 *** (p = 0.000)		0.098 ** (p = 0.000)

Note: The t-statistics are reported in parentheses on robust standard errors clustered at the firm level. *, **, and *** designate statistical significance at the 10%, 5%, and 1% levels, respectively.

reports the regression results of the grouping of green financing constraints. The results show that when private enterprises face higher green financing constraints, STATETS, STATEB, STATE_D, and STATE_DJG are significantly and positively correlated with CERID. This suggests that green financial support is a crucial element that affects carbon emission reduction through state-owned capital participation.

7. Conclusions and Discussion

7.1. Managerial Applications

For private enterprises, priority should be given to the participation of state-owned capital in top-level governance. They should proactively introduce directors, supervisors, or senior executives appointed by state-owned shareholders and establish an ESG specialized committee under the board of directors to transform public environmental goals into decision-making on low-carbon technological transformation for high-energy-consumption processes. Simultaneously, private enterprises should establish a dedicated green technology fund account to allocate environmental subsidies derived from state-owned capital toward industrial energy-saving equipment upgrades. Furthermore, mandatory disclosure of energy conservation and emission reduction information in annual reports is crucial to strengthening investor confidence in the firm’s transition toward a low-carbon development paradigm.

For state-owned capital investors, priority can be given to taking stakes in enterprises located in regions with weaker environmental regulations or lower marketization levels, operating in highly competitive industries, or facing severe green financing constraints. Through equity checks and balances and governance penetration, such investments can compensate for institutional and resource deficiencies, thereby generating more significant carbon emission reduction effects. Additionally, state-owned capital investors can assist their invested private enterprises in connecting to government green projects, bank green credit, and carbon trading markets, mitigating the financing constraints hindering carbon emission reduction efforts.

For supply chain collaboration entities, core enterprises in high-emission industries can partner with state shareholders to integrate carbon emission intensity into supplier evaluation systems. By sharing energy efficiency improvement technologies derived from the involvement of state-owned capital, they can disseminate standards for low-carbon production processes and equipment renovation schemes to small- and medium-sized suppliers in the upstream and downstream, thereby achieving collaborative emission reduction across the supply chain. Furthermore, in highly competitive sub-sectors, private enterprises can capitalize on the enhanced environmental reputation derived from state shareholding to implement premium pricing strategies for low-carbon certified products. This transforms emission reduction performance into a competitive lever, facilitating the synergistic optimization of economic and environmental benefits.

7.2. Conclusions

Harmonious coexistence between human beings and nature is a distinctive feature of Chinese-style modernization, and the private economy is the driving force of Chinese-style modernization. Consequently, effectively leveraging state power to integrate state-owned capital’s resource advantages with private capital’s market flexibility—aiming to reduce emissions while advancing sustainable private sector development—requires further investigation. This study examines how state-owned capital participation affects private enterprises’ carbon reduction through equity governance and top-level governance, offering insights for accelerating low-carbon transitions during institutional reforms. The results of the study show the following. (1) After the participation of state-owned capital in private enterprises, the degree of state-owned capital participation (STATETS), the counterbalance degree of state-owned capital (STATEB), the degree of state-owned capital director governance (STATE_D), and the degree of state-owned capital director, executive, and supervisor governance (STATE_DJG) are significantly positively correlated with carbon emission reduction. This indicates that the higher the degree of state-owned capital involved in private enterprises, the better the carbon emission reduction of private enterprises, and the more it is able to drive private enterprises to conduct green transformation. (2) The mechanism analysis reveals that state-owned capital participation can enhance private enterprises’ government environmental protection subsidies, fulfillment of environmental social responsibility, and total factor productivity by strengthening the multiple mechanisms of resource base, value recognition, and energy efficiency. These optimized resource allocations and conserved energies collectively drive carbon emission reduction. (3) The heterogeneity analysis indicates that the positive impact of state-owned capital participation on the carbon emission reduction of private enterprises occurs significantly only under stringent environmental regulations, lower regional marketization degree, high industry competition, or severe green financing constraints. Given varying external development environments and internal corporate characteristics, the impact of enterprise governance structure changes on environmental performance varies considerably.

7.3. Discussion

Mixed-ownership reform characterized by state-owned capital participation constitutes a pivotal component of China’s property rights reform. Xu, Yuan and Yu [28] employed a time-varying difference-in-differences model to evaluate the impact of mixed-ownership reform on corporate pollution emissions. Their findings revealed that private enterprises that introduce state-owned capital exhibit reduced SO₂ emissions. This reduction primarily occurs when enterprises face heightened pollution reduction pressure and passively achieve compliance by scaling back production [34]. These results validate this study’s core proposition that state-owned capital participation promotes carbon emission reduction in private enterprises. However, distinctively, based on social identity theory, we find that state-owned capital participation can function by endowing private enterprises with a new identity label. This motivates them to enhance their value recognition with environmental social responsibility and proactively improve energy use efficiency. Thereby, the governance mechanism of state-owned capital is deepened from “passive output reduction” to “active efficiency enhancement,” broadening the theoretical support for carbon emission reduction pathways driven by mixed-ownership reform. Meanwhile, this study’s heterogeneity analysis aligns with Yang, Zhang, Gao and Yang [51], confirming that contextual factors, such as a lax regulatory environment and intense industry competition, amplify the green governance effects of state-owned capital. Furthermore, we measure state-owned capital participation from the dual dimensions of equity governance and top-level governance, verifying the critical role of top-level governance in enhancing energy efficiency. This approach addresses the limitation of Qian and Li [35], which focused solely on a single governance dimension while expanding on the measurement of state-owned capital participation and the demonstration of carbon emission reduction effects.

In developed economies, Andersen, et al. [109] investigated the carbon emission impact of sovereign wealth funds through a case study of Norway’s Government Pension Fund Global (NBIM). Their analysis demonstrated how portfolio allocation advances low-carbon transitions, contending that the substantial asset base of sovereign wealth funds positions them as potent enablers of decarbonization initiatives. In developed economies, sovereign wealth funds are influenced by market governance mechanisms, such as investor ESG demands and carbon tax risks, to affect carbon emissions. Unlike the market pressure-driven approach in developed countries, state-owned capital in China is more subject to administratively oriented goals, including dual carbon policies and official performance evaluations. It achieves carbon emission reduction through policy resource allocation, embedded personnel appointments, and production process oversight [28]. This study, adopting perspectives of resource allocation and governance penetration, provides a novel framework for examining how emerging economies achieve carbon emission reduction through property rights integration. Nevertheless, corporate carbon emission reporting rates and transparency remain suboptimal across both developed and emerging economies.

Furthermore, in another emerging economy, state-owned ownership has exerted negative effects on corporate social responsibility in Indian firms [110]. This contrasts with findings from China, where state-owned capital effectively promotes environmental practices in regulation-deficient regions. China’s state-owned capital addresses market failures by translating policy objectives into tangible corporate emission reduction actions through delegated personnel participation in governance [36]. In contrast, state-owned enterprises in India are likely to encounter impeded policy implementation due to constrained decision-making autonomy among managers and an inability to engage deeply in governance. This further underscores the importance of extending mixed-ownership reforms to the dimension of top-level governance. Lourenço and Branco [111] demonstrated that in markets characterized by high ownership concentration and weak regulatory enforcement, corporate sustainability performance is primarily driven by financing features such as reduced ownership concentration and international listings. In China, state-owned capital participation similarly diminishes ownership concentration in private enterprises, thereby facilitating green low-carbon transitions through effective supervision [51]. This study provides valuable insights for other emerging economies seeking to effectively leverage state-owned capital for sustainable development.

7.4. Policy Implications

This paper offers the following policy recommendations: (1) Actively encourage state-owned capital to participate in private enterprises in a variety of forms, taking into account both the “mixing” of the equity level and the “reform” of the governance level. The study finds that state-owned capital participation can accelerate carbon emission reduction in private enterprises by virtue of shareholding and appointing personnel. Such participation should extend beyond equity transfers to substantive governance engagement, including appointing directors, supervisors, and executives, optimizing corporate power structures, and establishing governance mechanisms featuring transparent accountability, operational coordination, and effective checks and balances. It encourages private enterprises to better allocate resources and provides conditions for promoting the low-carbon transition and achieving green sustainable development. (2) Leverage the core advantages of different property rights to establish a synergistic relationship between proactive government and market mechanisms. State-owned capital is a critical bridge between the government and the market, and it should actively implement its subjective initiative, using its “voice” in the general meeting of shareholders, the board of directors, and the senior management team. While providing green resources, it should strengthen private enterprises’ value recognition of carbon emission reduction and build a complete green governance system to ensure the steady advancement of national environmental protection goals. Concurrently, private enterprises should leverage their flexible market mechanisms to balance low-carbon technology development with daily operations. By improving energy efficiency and reducing emissions, they can achieve dual economic and environmental benefits. (3) Continuously improve the internal and external environmental characteristics of private enterprises and maximize the green governance function of state-owned capital. As evidenced, the emission reduction effect of state-owned capital participation is influenced by external development environments and internal enterprise characteristics. Thus, governments should refine environmental policies and institutional frameworks by providing environmental subsidies, tax incentives, and green credit for private enterprises’ emission reduction initiatives. It also provides a fair and favorable financing environment and business environment for the conduct of carbon reduction activities by private enterprises, reduces the risks and uncertainties associated with carbon emission reduction, and enhances the green governance willingness. At the same time, government departments should establish a communication mechanism with private enterprises, providing environmental protection technology, talent, and knowledge through the appointment of personnel, to provide a solid guarantee for the carbon emission reduction of private enterprises.

7.5. Limitations and Future Research

This study presents preliminary research findings, with certain limitations that require further refinement. Firstly, we select privately listed industrial enterprises with publicly accessible data for this study. Carbon emission intensity is calculated using carbon emission information disclosed in official yearbooks. These yearbooks exclusively cover China’s industrial enterprises. While data from unlisted private industrial enterprises remain unavailable due to reporting constraints, state-owned capital may still influence carbon emission reduction activities in these enterprises through shareholding or appointed personnel. We will conduct longitudinal manual data collection on unlisted private industrial enterprises to systematically address this gap in subsequent investigations. Secondly, while our large-sample empirical approach yields generalizable patterns, it cannot present firm-specific causal mechanisms through which state-owned capital participation influences carbon emission reduction behaviors. Going forward, we will concentrate on typical private industrial enterprises with state-owned capital involvement, utilizing field surveys and in-depth interviews to obtain primary data. This will enable granular examination of green and low-carbon transition pathways within individual enterprises under state-owned capital participation.