Abstract: This paper selects the data of A-share companies in manufacturing industry listed in Shanghai and Shenzhen stock markets during the period from 2002 to 2015 to conduct a test on the impact of the privatization of state-owned enterprises on the enterprise innovation with the difference-in-differences model. The empirical results show that there is a significant negative correlation between the privatization of the state-owned enterprises and enterprise innovation, namely, compared with enterprises always keeping the state-owned nature, the privatization reform of the state-owned enterprises has weakened the innovative strength of enterprises. Based on the privatization reform of state-owned enterprises, this paper investigates the economic results of the privatization reform of state-owned enterprises from the management perspective and on the micro enterprise level, which can provide some empirical evidences for the state-owned system reform being carried out in China.

Key words: privatization; enterprise innovation; reform of state-owned enterprises; difference in differences model