Government Ownership And Bank Debt Of Listed Firms: Bank Discrimination Or Management Shirking?

Based on the unsophisticated financial system,imperfect legal system and limited capacity of public capital markets in China,the bank credit in the external financing of enterprises occupies a pivotal position.Due to the historical development factors,China's special economic system leads to the specific nature of the property,that is,state-owned enterprises and non-state-owned enterprises.The common nature of property rights of state-owned commercial banks and SOEs and the policy burden borne by SOEs are likely to lead to bank discrimination against non-SOEs under the framework of soft budget constraints.Under this framework,the level of bank borrowing of SOEs should be significantly higher than that of non-SOEs.However,in recent years,some scholars have found that SOEs have lower bank borrowing levels than non-SOEs,which is clearly inconsistent with the bank discrimination hypothesis.In order to explain this contradiction and clarify the mechanism behind it,it is necessary to discuss the relationship between property rights and bank discrimination in depth.Choosing the listed companies of A-share in China from 2008 t o 2015 as data,combined with China's special economic environment and institutional background,taking the perspective of supply and demand of credit market as the starting point,the paper analyzes the bank borrowing level of the firms when the financing constraint is serious and the level of bank borrowing in the case of financing will reduction due to management shirking separately.Measure the bank borrowing level from the perspective of stock and increment,this paper first examines the relationship between the government ownership and the level of bank borrowing.The empirical results support the fact that the level of bank borrowing of SOEs is lower.Taking into account the need for bank discrimination to be based on the premise of financing constraints and the role of credit supply and demand in the contract,this paper examines the relationship between the government ownership,financing constraints,management shirking and the level of bank borrowing.The results show that the bank discrimination is obvious when firms are facing financial constraints under the financial difficulties.The SOEs are more advantageous in obtaining the bank credit funds.When firms have a high investment opportunities and low free cash flow,the bank can identify this company relatively healthy financial situation which weaken the impact of property credit based on discrimination.There are no significant differences between SOEs and non-SOEs' bank debt level.When firms face financial constraints under the condition of asymmetric information,its impact on bank credit decisions is less and there are no significant differences between SOEs and non-SOEs' bank debt levels.On the contrary,when the company's profitability is outstanding and the cash is abundant,the SOEs show lower levels of bank borrowing,which may be related to management shirking and enjoying quiet life of SOEs.This paper expands the depth of interpretation of bank discrimination based on property rights,which provides a new perspective and evidence for the study of property rights and bank discrimination.It also has some reference value for accurately defining the functions of the government,perfecting the financial system and promoting the mixed ownership reform of SOEs.