Abstract: One of the aims of the asset management system reform of state- owned enterprises is to improve the incentive mechanism of technological innovation, and to realize the higher quality of real economy and more sustainable growth. Based on the similar quasi experiment of the practice of privatization reform of state-owned enterprises, this paper studies whether the privatization reform of state-owned enterprises affects the R&D investment of enterprises. Employing DID model and taking the privatization samples of listed companies in stock markets of Shanghai and Shenzhen as research samples,the paper finds that the willingness and intensity of R&D investment by the reformed enterprises are significantly improved,and this positive effect is sustainable after the privatization;with a higher shareholding ratio of senior executives, the increase of R&D investment is more obvious in enterprises implementing the privatization. Furthermore, this paper also studies influence mechanism. The results show that the privatization enterprises affect the R&D investment through reducing political costs and agency costs.

Key words: privatization of state-owned enterprises, R&D investment, political cost, agency cost