Does the removal of policy burdens promote the real economy orientation of SOEs

Based on data from A-share enterprises from 2011 to 2019, this paper uses the Lean and Heal Reform as a quasi-natural experiment and employs a multi-period Difference-in-Differences (DID) method to investigate the impact of shedding policy burdens on the financialization of SOEs. The study finds that shedding policy burdens significantly reduces the proportion of financial asset allocation and the reliance on financial returns among SOEs, promoting their return to core business operations. The underlying mechanisms manifest through the curtailment of both speculative motives and earnings management motives. Heterogeneity analysis indicates that the reform effect is more pronounced in regions with lower fiscal pressure, more developed factor markets, larger SOEs, and SOEs whose executives lack financial backgrounds. Further research shows that this reform not only mitigates the negative impact of financialization on corporate value but also optimizes the alignment between financial assets and actual demand. The study demonstrates that shedding policy burdens is a crucial pathway for SOEs to “shift from virtual to real” economy. Through institutional optimization, governance enhancement, and guidance on asset allocation, this reform can drive SOEs to refocus on building core competencies in their primary industries. These findings provide significant policy implications for advancing SOE reform and achieving high-quality development.