Impact On Business Inefficient Investment Of State-Owned Capital Management Budget Implementation

In China, operating state-owned assets aim at profits, see state-owned enterprises as an important carrier, and occupy an important position in the state-owned assets system. Management level of SOEs has a significant impact on the healthy and orderly operation of the national economy. September 8,2007, the State Council issued the "State Council on the pilot state capital budget," and proposed a preliminary framework for state-owned capital management budget, the state capital budget at the central level were compiled since in 2008. This signified that the state-owned capital management budget system has implemented. This means that the included central enterprises in the scope of budget began to pay dividends to the government, the state-owned enterprises turned over profits to the state prelude to re-open. After the enterprise paid pro rata portion of the profits, financing within the enterprise become small, which can curb excessive investment behaviors of enterprises to a certain extent. Meanwhile, the implementation of state-owned capital management budget will help standardize and optimize the direction of state capital budget expenditures, which will help to co-ordinate the deployment of state-owned assets management agency of state-owned capital budget income, and to ease the cash shortage insufficient business investment behavior to a certain extent.Currently, a large number of domestic empirical studies have focused on the design framework of state-owned capital management budget system, the less the effect of the implementation of the system of research, and most did not study the impact of the system on the lack of business investment. Based on this, this paper employs 2005-2014 the central enterprises controlled listed companies as the research object, through normative and empirical research methods to investigate the influence of state-owned capital management budget system on the enterprises’ inefficient investment. This paper has important theoretical significances, it makes for further improvement of the state-owned capital management budget system and improve corporate inefficient investment.Considering the theme of study, this paper consists of six parts:Introduction is Chapter I, and it introduces this paper’s background and research value, raises research designs and methods, and puts forward the technology roadmap in this part. Chapter II is literature review, which includes foreign capital budget management, non-domestic investment efficiency research, and put forward the research points of this paper. Chapter III is the theoretical basis and assumptions, which defines the main concepts of this article, including the state-owned mix change, the state capital budget, inefficient investment, analyzes some basic theories, such as the principal-agent theory, asymmetric information theory, the state capital budget system functions and goals, free cash flow hypothesis theory. Basically, hypothesis are put forward. The empirical study design of this paper is Chapter IV. It elaborates on empirical models and the variables. The empirical results and analysis are showed in Chapter V, which are made up of descriptive statistical analysis and regression analysis. What’s more, a series of robustness tests are conducted, in order to convince people the robustness of the results. Chapter VI is the conclusions and prospects. According to the results of regressions, conclusions are drawn. And, On the basis of research conclusions, relative policy suggestions are put forward. Besides, the highlights of innovation and shortcomings of the paper are also pointed out.This thesis finds that the state-owned capital operating budget can curb excessive investment behavior of enterprises, and the proportion of state-owned enterprises paid capital gains negatively correlates with investment levels. Because after the system is implemented, corporate retained profits reduce, and corporate funds for direct investment source decrease, which restrain excessive investment to some extent. In terms of underinvestment, state-owned capital operating budget can slightly alleviate the cash shortfall enterprises’underinvestment, but it can’t fundamentally solve the problems caused by inadequate investment cash shortages. There was no significant correlation between the proportion of paid and insufficient level of investment, indicating that the current proportion of state capital gains paid should be improved. This thesis provides data support for further improve the budget system for state capital.