Can"Reverse Mixed Ownership Reform"Inhibit the Financialization of Private Enterprises?
In recent years,as the profit gap between the financial industry and the real economy continues to widen,more and more enterprises in the real economy have begun to reduce investment in their core business and instead channel their resources into the financial sector in pursuit of higher returns.The private economy,as an indispensable component of the market economy,is an important force in carrying out the national strategy.In the current context of vigorous development of the real economy in China,whether the state ownership participation in private enterprises can inhibit their financialization and make them focus on the development of real industries remains to be further studied.From the perspective of"reverse mixed ownership reform"in which private enterprises participate in mixed ownership reform,using data from privately owned non-financial A-share listed companies from 2013 to 2022,this study empirically examines the impact of state ownership participation on the financialization of enterprises.The study finds that state ownership participation can effectively inhibit financialization in private enterprises.The mechanism is that state ownership participation improves bank lending to private enterprises and improves the quality of their internal controls.The heterogeneity test reveals that state ownership participation as a strategic investor has a more significant inhibitory effect on the financialization of private enterprises.Meanwhile,the inhibitory effect of state ownership participation on the financialization of private enterprises in highly competitive industries is more significant.Further study shows that the"CPC's Party Building into Articles of Association"and the financial regulatory intensity can significantly enhance the inhibitory effect of state ownership participation on financialization in private enterprises.Furthermore,while state ownership participation weakens financialization in private enterprises,it can effectively promote their R&D output.This paper extends previous literature in three aspects.First,this paper based on equity balance theory and the governance effect of the public-owned characteristic contained in state ownership,analyzes the role and mechanism of state ownership participation in enterprise financialization from the perspective of private enterprises implementing financialization's"preventive motivation"and"profit-seeking motivation".Second,this paper regards"CPC's Party Building into Articles of Association"as an important channel for enterprises to strengthen internal supervision,and analyzes in depth the synergistic effect of state ownership participation and"CPC's Party Building into Articles of Association"in inhibiting the financialization of private enterprises.Third,this paper analyzes the moderating effect of the intensity of financial regulation on the inhibiting effect of state ownership participation on the financialization of private enterprises.
state ownershipcorporate financializationCPC's Party Building into Articles of Associationfinancial regulatory intensity
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