Research On The Path And Mechanism Of Party Organization Improving State-owned Enterprises Investment Efficiency

The unique institutional background,property rights structure and market environment determine that the corporate governance of state-owned enterprises in China cannot completely copy the modern corporate system of western developed countries,especially the structure of “manager-controlled” under the administrative intervention of state-owned enterprises.Faced with the "party and government unity" system,as well as the political core position of the party organization in the enterprise guaranteed by the Constitution,the "Company Law" and the "Communist Party Constitution",the party organization participates in corporate governance has become a featured advantages for state-owned enterprises in China.At the 2016 National Stateowned Enterprise Party Construction Work Conference,General Secretary Xi Jinping's important speech further clarified and implemented the legal status of the party organization in the corporate governance structure,marking the party organization's participation in corporate governance into the "new normal."More and more scholars have begun to pay attention to the participation of party organizations in corporate governance,a state-owned enterprise governance model with Chinese characteristics,but few studies have directly examined its impact on investment activities and its mechanism.While investment can bring scale effects to enterprises,it is usually accompanied by many risks,such as increasing on-the-job consumption,causing excessive loss of company shareholders' wealth and increasing the possibility of enterprises falling into financial difficulties.What is the role of party organizations in corporate investment activities? Is it a response to the organization's call to become a strong and big company,investing in investment,or able to identify efficient investment opportunities? Is it playing the role of a steward or a "grabbing hand" ? How are these effects affected by the environment? In view of the above problems,this paper selects the three most common types of corporate investment activities,capital investment,R&D investment and M&A as the dimensions,based on principal-agent theory,housekeeping theory,high-step team theory and bounded rationality theory.On the basis of combing and analyzing the theoretical basis,theoretical analysis and empirical tests are carried out on the mechanism of the participation of party organizations in corporate governance influencing corporate investment activities,and further analysis of how this role is influenced by the internal and external environment of enterprises.This paper follows the research paradigm from norm to evidence.The first chapter introduces the background and research framework of this paper.The second chapter reviews the theory and empirical research of party organizations participating in corporate governance and the perspectives of enterprise investment,R&D innovation and corporate mergers and acquisitions in the existing research at home and abroad.The third chapter systematically sorts out the institutional background from the three levels of state-owned enterprise reform,party organization's participation in corporate governance and investment,and analyzes the mechanism of party organization's participation in corporate governance affecting corporate investment activities.The fourth chapter begins with the empirical part.This paper selects the 2007-2016 state-owned listed company as a research sample,and uses four different indicators to measure the participation of party organizations in corporate governance.From the perspectives of enterprise investment,R&D innovation and mergers and acquisitions,it examines how party organizations affect investment activities.The seventh chapter summarizes the full text and puts forward the research shortcomings and prospects.The main conclusions of this paper are as follows:First,the participation of party organizations in corporate governance can help companies identify investment opportunities,reduce inefficient investment,and maintain stable development of enterprises.The "18th National Congress" once again consolidated and emphasized the important position of party organizations in enterprises.The influence of party organizations participating in corporate governance on corporate investment activities was more obvious after the "18th National Congress".Second,the participation of party organizations in governance can form a certain supervisory check and balance for managers,inhibit the behavior of private investment by expanding R&D investment caused by managerial power and overconfidence,and make R&D and expansion decisions more stable and cautious,and improve R&D efficiency of enterprises.Third,the participation of party organizations in corporate governance will make corporate M&A decisions tend to be stable,which will help reduce the probability of blind expansion of mergers and acquisitions strategies.In enterprises that have initiated M&A decisions,party organizations tend to reduce large-scale M&A activities and reduce the scale of mergers and acquisitions.In corporate mergers and acquisitions,the theory of “the hand of plundering” does not apply to government intervention in the form of party organizations participating in corporate governance.This article has the following important contributions and innovations:First,systematically provide theoretical and empirical evidence of the role of party organizations in the investment activities of state-owned enterprises,confirming the "maintenance" role of party organizations,and helping the academic and practical circles to better understand the role of party organization in state-owned enterprises.Regarding the role of party organizations in state-owned enterprises,neither the theoretical nor the practical circles have reached an agreement.In practice,this leadership system is generally pessimistic.This paper firstly combs the historical evolution of the party organization's participation in corporate governance.It shows that the party organization's participation in corporate governance has a legal basis and historical background from the perspective of historical development.It is accompanied by the reform of China's state-owned enterprises and is unique to Chinese state-owned enterprises.Then,this paper analyzes how the party organization affects the enterprise investment activities by combining the logical reasoning with the empirical test.It finds that the party organization plays a role in maintaining the steady development of the enterprise in the investment activities of the state-owned enterprises,and can reduce the impact of self-interested and irrational behavior of the managers on business efficiency.Second,it explores the influence path and mechanism of party organizations' participation in corporate governance on corporate investment activities,and provides an important idea for solving or preventing the loss of state-owned assets in real life.Based on the principal-agent theory,stewardship theory,high-step team theory and bounded rationality theory,and other backgrounds,this paper discusses the mechanism of the party organization's participation in corporate governance affecting corporate investment activities,and fills the current situation.Some researches have flaws about insufficient path analysis,this paper have expanded the theoretical analysis and economic consequences of party organizations' participation in corporate governance.The research results show that the party organization has an important inhibitory effect on the low efficiency of state-owned resource allocation and the loss of state-owned assets caused by managerial power and other irrational factors,and can be used as a reference for how to improve the utilization efficiency of state-owned assets.Third,it enriches the research on the theory of high ladder team and the background characteristics of managers.The high-stairs team theory is often used to explore the influence of different background characteristics of managers on management style and corporate performance.The existing research found background characteristics of managers have a great influence on executive behavioral decision-making from the characteristics of managers' multiple dimensions.However,few studies treated managers' "party committee attributes" and "rational managers" as the background characteristics of managers,and analyzed its influence on the psychological structure of managers in the high ladder team theory.Based on the theory of high-level team,this paper takes investment decision-making as the foothold,and discussed how the dual identity of managers will affect their management style and corporate performance.It enriched the research on high-level team theory and manager background characteristics.