Research On Investment And Financing Of Central State-owned Enterprises

"Central state-owned enterprises"is a new term which emerged with the establishment of the SASAC in 2003.With the emergence of the term of Central state-owned enterprises, varieties of disputes involved Central state-owned enterprises has never interrupted."Financing misappropriating","investment hunger","inefficient investment"and"monopoly of Central state-owned enterprises against social welfare"etc. ,which generated in the process of the investment and financing of Central state-owned enterprises, have a high concern and debate of the government, media, academia and society. This article focuses on the theme of Central state-owned enterprises—a kind of special enterprises—and a wide range of controversial issues that produced in the process of investment and financing, carries on carefully summarizing of history and logic and in-depth theoretical reflection, then analyze Central state-owned enterprises investment and financing issues deeply and Systematically.First, in the introduction of the concept of the central state-owned enterprises of sorting out and explore the depth that the full definition of the Central state-owned enterprises in China, refers to the state-owned enterprises of Central Government as the investor, divided into broad and narrow sense. Then, study the nature of Central state-owned enterprises, refer to Central state-owned enterprises is a concept unique to China, is the concept of a dynamic adjustment and a concept of historical evolution, and the definition of this concept for the Central state-owned enterprises and the uses. Meanwhile, define and explain the concept of investment, financing, market power and monopoly status in this article. As the basis for the research, systematically summarize the theory of corporate finance, the theory of corporate investment and the theory of industrial organization, and review the literature of corporate investment and financing and investment and financing of state-owned enterprises.Then, analyze the origin, the nature and the specificity of the investment and financing issues of Central state-owned enterprise along the thread of logic and reality in this article. On the basis of systematically summarized theories of the nature of the enterprises, reflect and discussion the nature of state-owned enterprises. On the basis of analyzing the nature of state-owned property, on the nature and efficiency of the state-owned property as the standard, conclude the industries and areas where the state-owned property should be configured in the theory and logic. On the basis of analyzing the differences between state-owned enterprises and enterprise state- owned equity and the evolution from state-owned enterprises to enterprise state- owned equity, conclude the state-owned enterprises are a special kind of state- owned equity holding. Then, analyze and summarize the sources and the characteristics of each stage of the reform of the state-owned enterprises in China, and then conclude the current situation and the direction of future development of Chinese state--owned enterprises. Finally, On the basis of logic analyzing and realistic induction, conclude the origin of Central state-owned enterprises, point out the formation of Central state-owned enterprises is the results which Chinese state-owned enterprises reformed. After the layout of Chinese stated-owned capital have completed strategic adjustment, Central state-owned enterprises will become the main Chinese state--owned enterprises, to some extend, will become a synonym for Chinese state--owned enterprises. According to the logic thinking and actual development direction of the reform of Chinese state-owned enterprise, Central state-owned enterprises will naturally have industrial organization attribute of monopoly status or market power, will naturally have property attribute of state-owned enterprises or state-holding enterprises. The two attributes determine that the investment and financing issues of Central state-owned enterprises have strong particularity.Under the conditions of market power, study the investment and financing issues of Central state-owned enterprises. First of all, summarize the history and current situation of Central state-owned enterprises, systematically review the distribution of profits and the retention system of Central state-owned enterprises, and the sources and channels of external capital of Central state-owned enterprises. Secondly, study the origin and composition of market power of Central state-owned enterprises, and the relation between market power and financing soft restriction, conclude that the investment excessive of Central state-owned enterprises is the result of joint action of market power and financing soft restriction, propose that Central state-owned enterprises should choose value maximization as financing objectives, rather than scale maximization. Then, analyze Pecking Order Theory and Chinese Pecking Order Paradox. In comparing the properties and advantages and disadvantages of debt financing instruments and equity financing instruments, conclude that investors and managers of Central state-owned enterprises have different financing preference based on their own objective functions. Finally, study on the choice of capital structure of Central state-owned enterprises in monopoly industries, propose that on the premise of monopoly status and market power of Central state-owned enterprises can not being changed, regarding monopoly status and market power as exogenous variables, by changing the capital structure of Central state-owned enterprises, effectively reduce that Central state-owned enterprises take advantage of monopoly status to aggrieve social welfare, make resources configuration of the Central state-owned enterprises and the whole society achieve Pareto improvement.Under the conditions of agent conditions, study the investment issues of Central state-owned enterprises. First of all, review the history of investment system of Central state-owned enterprises, summarize the current situation of investment system of Central state-owned enterprises. Secondly, in multi-goal conditions, analyze the investment decisions of Central state-owned enterprises, propose that controlling shareholders and managers respectively have a dual objective function, multiple goal function will lead directly to the unbalanced allocation of investment risk and return. Meanwhile,"free-rider"investment in the policy guidance and the lack of decision-making mechanism of board of directors will lead to excessive investment of Central state-owned enterprises. Then, in multi-agent conditions, analyze the investment processes of Central state-owned enterprises, propose that investment of Central state-owned enterprises is a multi-agent chain of principal-agent mechanism. Rent-seeking behavior of the investment agency leads to investment net loss. There are corruption behaviors of hidden information and hidden actions in executive investment. And then, in market power conditions, analyze the investment results of Central state-owned enterprises, propose that, as the special agency relation in the interior of Central state-owned enterprises, there is stimulate excessive problems. In the financial leverage helped generating investment excessive, excessive investment cause changes of market structure, with the market power and the monopoly status, eventually lead to periodic industry overcapacity. Finally, propose the measures of limited leveraged investment in the condition of own capital constraints and marketization investment in the condition of financing constraints.Study investment decisions and financial planning of Central state-owned enterprises. First of all, discuss the enterprise investment and financing issues with the theories of industrial organization. Analyze the relation between sunk costs and irreversible investment, and the impact of investment on market structure, conclude that investment behaviors of enterprise monopoly status and market power will affect market structure, conduct and performance. Secondly, On the basis of analyzing NPV investment decision theory, risk-adjusted investment theory and real option investment decision theory, analyze investment decisions of Central state-owned enterprises, conclude that the important reason of excessive investment and investment losses of Central state-owned enterprises is excessive partiality or over-emphasized of some theory in the investment decision-making process. Then, study the theories of enterprise financing costs, discuss the optimal level of financial leverage and optimal risk allocation ratio in the enterprises, propose that Central state-owned enterprises should try to reduce financing costs in the financing planning process, select the optimal level of financial leverage. Finally, analyze the effect which the theoretical system of EVA optimize investment and financing of Central state-owned enterprises, conclude that the use of investment and financing evaluation system of economic value added can effectively control the investment scale of Central state-owned enterprises, reduce capital costs, alleviate the problem of excessive financial leverage, improve the quality of investment and financing and the effectiveness of investment and financing. Study investment and financing system arrangement of Central state-owned enterprises. First of all, propose to build multi-level financing system in the Central state-owned enterprises. Establish Central state-owned enterprises financing objectives of enterprises value maximization; expand the proportion of direct financing; improve the capital structure and shareholding structure of Central state-owned enterprises; optimize the indirect financing structure and reduce financing costs and financial risk of Central state-owned enterprises. Take the advantage of building up more comprehensive levels of financing system of Central state-owned enterprises to optimize the capital structure of Central state-owned enterprises, reduce financing costs. Secondly, propose to improve the investment system of Central state-owned enterprises in the condition of principal-agent. Improve the internal decision-making mechanisms and external audit mechanisms of investment; strengthen the self-owned capital investment restriction mechanism; inhibit excessive investment; strengthen the monitoring mechanism of the investment process; compensate for lack of subprime contract. And then, propose to build the checks and balances of investment and financing decisions of Central state-owned enterprises in the condition of state-owned holding. On the basis of analyzing the lack of checks and balances of investment and financing decisions in the condition of state-owned absolutely holding, give the preliminary design of checks and balances of investment and financing decision-making. Finally, On the basis of analyzing the relation between the Central state-owned enterprises and the market mechanisms, propose the idea to improve the marketization governance. Improving the marketization governance is a fundamental way which can optimize the performance of Central state-owned enterprises and maximize the interests of investors and optimize the allocation of resources of the whole society.Finally, a summation is made to generalize the relevant conclusions in this paper.