A Study On The Influence Of Board Social Capital On Firm Value In China

The private economy is an important part of China's economy.Private enterprises can not only promote the growth of national revenue and income,but also play an important role in the adjustment of the national economic structure and the smooth operation of the market economy.However,the operation of private enterprises often faces many difficulties,including problem of financing,which is the most intractable problem.The existing domestic financial system provides financing support to private enterprises much less than state-owned enterprises.Credit discrimination is widespread existed.In the case of the formal system can't provide protection,private enterprises increasingly inclined to seek informal alternative mechanisms to solve their financing problem.The access to financing resources through networks of members of the board becomes one of the preferred private enterprises in recent years.This paper finds a starting point to sought informal protection for private enterprises under credit discrimination.Based on the resource dependency theory and resource-based view and China's special economic system in the background,We establish a causal chain,where "ability to credit resources" become intermediary bridge between "board social capital of private firms "and" firm value".Based on the previous studies and the specific situation of China's private enterprises,We measure board social capital of private firms in three different parts:political connection,financial background and interlock director network.At the same time,We use the firm efficiency calculated from stochastic frontier model and Tobin's Q to measure firm value.We try to explore the influence of the these three types of social capital on firm value and whether the ability to obtain credit resources can be the mediation bridges of board social capital and firm value or not.In the empirical analysis,this paper uses dynamic panel data of public companies of private enterprises from 2008 to 2014 to test the hypotheses,which this paper proposes,using the system GMM estimation methods(SYS-GMM).The empirical results show that three types of board social capital of private firms can influence firm value positively.But only the political connection and financial background can have a positive impact on the firm's ability to obtain credit resources.The firm's political connection of board can improve the firm value partly through the ability to obtain credit resources and this conclusion also exists in the financial background of board.Finally,this paper gives some feasible recommendations on how to improve credit financing predicament of private enterprises.From the theoretical sense,this paper not only provides a new theoretical perspective on the studies of the connection between social capital and firm value,but also provides theoretical guidance for future research.From the practical sense,this paper analyzes the questions on the living situation of private enterprises,which brought more instructive reference for our further financial system reform.