State-owned Capital Authorized Operation System Reform and Excessive Debt of State-owned Enterprises
Preventing debt risks is the foundation for the survival and development of enterprises,and it is also an important goal of state-owned enterprise reform in the context of high-quality development.However,state-owned enterprises have the characteristic of significantly high debt ratios.Therefore,since 2015,the Central Economic Work Conference has repeatedly focused on reducing the debt ratio of state-owned enterprises.The goal of reducing debt should be to lower the asset liability ratio to a reasonable level,rather than the lowest level.The level of excessive debt reflects the gap between the actual debt level and the optimal debt level.Excessive debt can cause serious damage to the operation and development of enterprises.Therefore,the governance of excessive debt in state-owned enterprises deserves special attention.Existing literature has found that the main causes of excessive debt in state-owned enterprises are policy burdens and budget soft constraints caused by government intervention,as well as management agency issues from internal control.However,there is limited empirical research on how to reduce the excessive debt level of state-owned enterprises.In November 2013,the Third Plenary Session of the 18th Central Committee of the Communist Party of China officially proposed the reform of the state-owned capital authorization operation system.Subsequently,policies related to the reform were successively promulgated,and the pilot of the state-owned capital authorization operation system was implemented and promoted.Existing research has shown that the reform of the state-owned capital authorization operation system is an important measure to optimize the performance of investors,delegate powers,strengthen the construction of exercise capabilities,and coordinate internal and external supervision.It plays an important role in suppressing issues related to government intervention and insider control.So,can the reform of the authorized operation system of state-owned capital promote the reduction of excessive debt levels in state-owned enterprises?By constructing a multiple-time-point difference-in-differences model,this paper takes state-owned listed enterprises in the A-share market from 2010 to 2021 as samples,and examines the impact of the reform of the state-owned capital authorization operation system on the excessive debt of state-owned enterprises.This paper finds that:(1)The reform of the state-owned capital authorization operation system can reduce the excessive debt level of state-owned enterprises;(2)Mechanism analysis reveals that reducing policy burdens,hardening budget soft constraints,and addressing management agency issues are important channels for the reform to reduce the excessive debt level of state-owned enterprises;(3)Further testing shows that in enterprises with high government decentralization willingness and controlled by state-owned capital operating companies,the reform has a more significant effect;The reform can significantly improve the speed of capital structure adjustment in state-owned enterprises,but this effect only occurs in state-owned enterprises with excessive debt problems,The reform can significantly reduce the operational risks of state-owned enterprises and improve their operational efficiency by suppressing excessive debt.The marginal contributions of this paper are as follows:Firstly,this paper focuses on the excessive debt of state-owned enterprises,enriching the research on the role of the reform of the state-owned capital authorization operation system.Secondly,this paper analyzes the logic between the reform of the state-owned capital authorization operation system and the excessive debt of state-owned enterprises,providing new ideas for understanding the influencing factors and response mechanisms of excessive debt of state-owned enterprises.Thirdly,this paper inherits and deepens the research by Qi et al.(2022)on the relationship between state-owned capital authorization operation system reform and the reduction of leverage in state-owned enterprises.This paper not only further supports the deleveraging function of the reform from the perspective of excessive debt,but also extends its mechanism analysis from the perspective of risk avoidance by managers to the perspective of policy burden and soft budget constraints.
state-owned enterprisesstate-owned capital authorized operation system reformexcessive debt
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