| In recent years,as China’s economic development has entered a new normal,economic operation is facing prominent structural problems and contradictions.The profits of the real economy are declining,and the returns of the virtual economy are high.A large amount of capital bypasses the real economy and enters the financial field,presenting a trend of “shifting from the real to the virtual”,resulting in structural imbalance between the real economy and the virtual economy.At the micro level,“shifting from real to virtual” refers to the substantial allocation of capital by real enterprises to financial activities,including not only traditional financial investment fields such as stocks and financial derivatives,but also involving entrusted loans,wealth management products and other financial activities that constitute an important part of China’s shadow banking system.As the whole shadow banking system,including entrusted loan activities,works outside of the safety supervision of traditional regulatory departments,threatening the stability of the entire financial system,the hidden risks generated by shadow banking activities should not be underestimated.As a unique loan business in China,entrusted loan activity has become one of the important symbols of financialization,especially the symbol of shadow banking of non-financial enterprises.According to the report by Moody’s Investors Service,entrusted loans have increased from 4.3 trillion yuan in 2010 to a peak of 11.1 trillion yuan in 2020,accounting for 18.75 percent of the scale of China’s shadow banking.Then,in the important period of China’s economic transformation,what are the important factors driving real enterprises to participate in entrusted loan activities from the perspective of corporate governance? Does the entrusted loan behavior of real enterprises have a significant effect on their financing decisions? In addition,as the risk bearers of entrusted loan activities,what is the effect of lending enterprises’ participation in entrusted loan activities on their own financial risks? Obviously,these important and realistic problems need to be solved.In view of this,this study manually collects the entrusted loan data issued by China’s A-share listed companies from 2006 to 2018.The main method is to manually judge and sort through the entrusted loan transaction data disclosed in the annual reports of listed companies.At the same time,we obtain some entrusted loan transaction announcements published by listed companies from Juchao information network,confirm and refine again the ambiguous or missing information of the transaction in the annual reports.Using China’s A-share non-financial listed companies as research samples,this study discusses the research background and theoretical basis of entrusted loans activities from the perspective of corporate governance.Furthermore,this research empirically examines the effect of ultimate ownership structure,executive equity incentive on entrusted loans behavior of enterprises,and the effect of entrusted loans behavior of enterprises on capital structure and financial risk,respectively.The main conclusions of this research are summarized as follows:First of all,research on the effect of ultimate ownership structure on entrusted loan behavior of enterprises:(1)Different structures of ultimate shareholder ownership have different effects on enterprises engaged in entrusted loans.Cash flow right significantly decreases the behavior of entrusted loans with the tunneling motivation.(2)Furthermore,the different effects of cash flow right and control-ownership wedge are significantly reflected in affiliated entrusted loans.(3)Compared with non-state-owned enterprises,the state-owned property of enterprises weakens the significant effect of cash flow right and separation of the two rights on enterprises’ entrusted loan behavior,respectively.Secondly,research on the effect of executive equity incentive on entrusted loan behavior of enterprises:(1)On the whole,executive equity incentive significantly inhibits enterprises’ entrusted loan behavior.(2)Furthermore,based on the relationship between the lender and the borrower,entrusted loans are classified into affiliated entrusted loans and non-affiliated entrusted loans.It is found that executive equity incentive has a significant effect on these two types of entrusted loans.(3)The state-owned property of enterprises weakens the restraining effect of executive equity incentive on entrusted loan behavior.(4)When executives have overconfidence,the inhibition effect of equity incentive on entrusted loan behavior becomes weaker.(5)Through the implementation of executive equity incentive,it is helpful to reduce the first type of agency cost between shareholders and managers,and the second type of agency cost between controlling shareholders and minority shareholders.These two types of agency costs partially mediate the relationship between executive equity-based incentive and enterprises’ entrusted loan behavior.Thirdly,research on the effect of entrusted loan behavior of enterprises on capital structure:(1)On the whole,entrusted loan behavior of enterprises increases debt level.(2)Furthermore,research shows that enterprises increase their debt level by issuing affiliated entrusted loans,but reduce their debt level by issuing non-affiliated entrusted loans.(3)Marketization process and the state-owned property of enterprises weaken the promotion effect of entrusted loan behavior on debt level.(4)Ownership concentration enhances the promotion effect of entrusted loan behavior on debt level.(5)Executive equity incentive weakens the promotion effect of entrusted loan behavior on debt level.Finally,research on the effect of entrusted loan behavior of enterprises on financial risk:(1)On the whole,listed enterprises engaged in entrusted loan activities significantly increase financial risk.(2)Furthermore,the issuance of affiliated entrusted loans or non-affiliated entrusted loans increases the financial risk of enterprises.(3)In addition,enterprises’ entrusted loan behavior also significantly increases the financial risk of enterprises in the next year.(4)High external industry concentration weakens the promotion effect of entrusted loans on financial risk of enterprises.(5)The state-owned property of enterprises weakens the promotion effect of entrusted loans on financial risk. |
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