  In recent years, more and more state-owned enterprises (SOEs) have been
embedded in the restructuring and governance of private enterprises through
equity participation, providing a more advantageous environment for private
enterprises in financing and innovation. However, there is a lack of knowledge
about the underlying mechanisms of SOE intervention on corporate innovation
performance. Hence, in this study, we investigated the association of state
capital intervention with innovation performance, meanwhile further
investigated the potential mediating and moderating role of managerial
sentiment and financing constraints, respectively, using all listed non-ST
firms from 2010 to 2020 as the sample. The results revealed two main findings:
1) state capital intervention would increase innovation performance through
managerial sentiment; 2) financing constraints would moderate the effect of
state capital intervention on firms' innovation performance.
