Research On The Relationship Between The Mixed Ownership Reform Of The State-owned Group And The Performance Of Affiliated Listed Companies

The mixed ownership reform is a major strategic measure to promote the highquality development of state-owned enterprises(SOEs),which is of great significance to optimize the distribution and structural adjustment of state-owned economy.Since the 18 th NCCPC,the mixed ownership reform of SOEs has made remarkable achievements.However,due to the characteristics of “difficulty in interest adjustment” and “high complexity to reform” of the state-owned business groups,the mixed ownership reform of SOEs is still mainly concentrated at the level of secondary and tertiary subsidiaries,and there is a prominent vertical structure imbalance.Promoting the expansion of the mixed ownership reform hierarchy to group companies will be an important direction to deepen the mixed ownership reform of SOEs in the future.Now most studies only focus on mixed ownership reform at the level of state-owned listed companies,and pay less attention to the reform of the state-owned group companies.But business groups are the main organizational form of SOEs in China,and multi-layer mixed ownership reform is an important path for the implementation of mixed ownership reform policy so the reform of state-owned group companies should not be ignored.The quantitative research on the economic consequences of mixed ownership reform of group companies not only provides valuable references for further promoting the multilayer mixed ownership reform of SOEs,but also an important expansion and supplement to the researches that take the state-owned listed companies as the bodies of mixed ownership reform,having great practical significance and theoretical significance.In business groups,the operating performance of subsidiaries is significantly affected by the associated group.On the one hand,the the internal market of business groups will reduce the subsidiaries' financial constraints,enhance their debt capacity,reduce the level of cash holding,internal capital market and associated guarantee will produce the effect of risk sharing,on the other hand,the group company will take certain control measures to limit the opportunistic behavior of the affiliated companies,but the over-centralization will also limits the operation autonomy and initiative of the subsidiaries.The business group's corporate governance mechanism determines how the group distribution resources and decision-making power.Therefore,the governance of the associated business group is an important factor that affects the operating performance of affiliated listed company.Some scholars have concerned the problem that the mixed ownership reform of the subsidiaries are facing challenges of limited influence power of non-state-owned shareholders and halfway market-oriented operational mechanism transformation in the case of absolute control of wholly state-owned business groups,which may cause the problem of incomplete reform.After the mixed ownership reform at the group level of SOEs,non-state-owned shareholders will naturally strengthen the incentive and supervision of the subsidiaries,have an impact on the original administrative control mode,which will help to make the mixed ownership reform more thoroughly.At the same time,the group's mixed ownership reform will directly improve the corporate governance mechanism form top to the bottom and produce spillover effect within the group,which will help to improve the corporate governance mechanism and market-oriented operation mechanism of their subsidiaries,and have an overall impact on the operation decisions and performance of the subsidiaries.Based on the background above,this paper manually collects data of stateowned group companies equity,and studies the whether and how the mixed ownership reform of state-owned group companies affect the operating performance of their affiliated listed companies,and discusses the heterogeneous impact of the listed companies' internal factors and external factors.The main conclusions of the empirical study are as follows:First,the mixed ownership reform of state-owned group companies significantly improves the performance of the affiliated listed companies,while the proportion of non-state ownership in group companies is significantly related to the performance of the affiliated listed companies in an inverted “U” shape,and the optimal equity ratio of non-state-owned shareholders is 40%-60%.If the equity ratio is lower than the optimal level,non-state-owned shareholders mainly play a role of governance to improve the subsidiaries' performance,while if the equity ratio is lower than the optimal level,non-state-owned shareholders' self-interest motivation plays a leading role,having an adverse impact on the business performance of listed companies.Further,we find that it is more beneficial to preserve and increase the value of stateowned assets to maintain the state-controlled status after the mixed-ownership reform of state-owned group companies,and the impact decreases with the length of the layer between group companies and affiliated listed companies,and the impact of the mixed-ownership reform is more significant in central or non-monopolistic business groups.Second,the mixed reform of group companies affect the operating performance of listed companies by affecting the incentive mechanism.When the equity ratio is lower than the optimal level,the group's mixed reform improves the company's operating performance by improving the incentive level of the managers of listed companies,but the incentive level declines if further increase the equity proportion of non-state-owned shareholders,which has a negative impact on the operating performance of the subsidiaries.Third,the mixed ownership reform of state-owned group companies affects the performance of affiliated listed companies by influencing the tunneling behavior of controlling shareholders.When the equity ratio is lower than the optimal level,the group's mixed reform improves the listed company's operating performance by decrease the tunneling of the group to listed companies,but the self-interest of nonstate-owned shareholders will intensify opportunity behavior of the group company as non-state-owned shareholders equity ratio further increase,which causes to the tunneling of the business group and has a negative impact on the operating performance of the subsidiaries.Fourth,the mixed ownership reform of state-owned group companies will affect the performance of affiliated listed companies by the degree of group control.When the equity ratio is lower than the optimal level,non-state-owned shareholders will strengthen the control of the group to the subsidiaries under stronger motivation to supervise the affiliated company,alleviating the group-subsidiary agent problem,which not only helps to reduce the management expenses and financial risk,but also cause to lower performance of listed companies.As non-state-owned shareholders equity ratio further increase,higher marketization degree of the group will reduce the group control,which helps to improve the business performance of listed companies,so the group control plays as a mediator which is a “suppressing effects”.Fifth,the influence of SOE group mix reform on the operating performance of affiliated listed companies is influenced by internal and external factors:(1)Major non-state-owned shareholders or directors of non-state-owned shareholders of the listed companies reduce the influence and discourse power of the group as the controlling shareholder,which will weaken the influence of the group company's mixed ownership reform.(2)The defensive behavior of executives of listed companies due to greater power will weaken the effect of the group's mixed ownership reform.(3)The interlock executives enhances the influence of the group,strengthen the effect of the group's mixed ownership reform.(4)International Big Four or domestic top ten accounting firms,more analysts tracking and higher media attention will lower the degree of information asymmetry,so the impact of the mixed ownership reform of the group company is more significant.(5)When the market competition is low,the impact of the mixed ownership reform of the group company is more significant on the subsidiaries.The main innovations of this paper are as follows:First,Based on the realistic background of stratified mixed reform of SOEs,this paper expands the research of consequences of the mixed ownership reform to stateowned business groups.Existing studies on SOEs mixed-ownership reform mainly focus on listed companies,while there are few quantitative studies on the economic consequences of state-owned business groups' mixed-ownership reform,which is incomplete in the institutional context of multi-layer mixed-ownership reform of state-owned business groups.This paper collects the shareholders' data of the stateowned enterprise group company,studies the effect of ownership reform of stateowned group company on the operating performance of affiliated listed company,which expands the research object and is a useful supplement to the existing research.Second,this paper proposes that non-state shareholders' will produce“governance” or “induced” effect when facing a “two-way” tunneling problem,providing a new idea for the influencing factors of the tunneling motivation of controlling shareholders and the behavior of non-state-owned shareholders in the mixed reform.The existing literature generally treats the interests of different shareholders of business groups as the overall interests without differences,without considering the impact of the divergent interests of state-owned and non-state-owned shareholders on the tunneling behavior of the group companies.On the other hand,researches believe that the non-state-owned shareholders play a governance role to the tunneling,ignoring the the “induced” impact of the non-state-owned shareholders.The self-interest motivation of the non-state shareholders of the group company will intensify the motivation of tunneling of the group company on the subsidiaries,but the non-state shareholders themselves may face tunneling by the actual controller of the group,facing a “two-way” tunneling problem,which may produce two different effects—“governance” and “induction” effect proved by empirical research findings.The above conclusions expand the research on the causal factors of the tunneling motivation of the controlling shareholders,and provide a new idea for the analysis of non-state-owned shareholders' behavior in the mixed ownership reform of SOEs.Third,this paper reveals the governance impact of non-state shareholders of the state-owned business groups on different principal-agency relationships based on the three types of principal-agency relationship in state-owned business group,and combined with the internal corporate governance of the listed company and and external governance factors to construct the analysis framework of corporate governance in business group,which provides reference for the governance effect of the mixed ownership reform of business group.The existing researches on how mixed ownership reform have a positive governance effect mainly include managerial governance effect and major shareholders governance effect,which is mainly based on the dual principal and agent relationship in a single enterprise.Based on the characteristics of state-owned business group,this paper add the principle-agency relationship between parent and affiliated company to the single enterprise's dual agency relationship,and analysis the governance effect of mixed ownership reform on different principal-agency relationship and its intermediary role,which constructs the corporate governance framework of business group,expands the dimensions of corporate governance effect of mixed ownership reform in individual SOEs.