Study On The Influence From Financial Resource Misallocation To Enterprise Performance

Finance is the core of the modern economy,and financial resources are the most important and active factors of production in modern market economy.The effective allocation of financial resources is the foundation of the development of the real economy,and is the basic requirement of the decisive role of the market in the allocation of resources.The financial resources will move from places where the marginal productivity is low to the places where the marginal productivity is high to reach the state of Pareto optimality under the effective allocation of resources,and the financial resource misallocation is the deviation from the state of Pareto optimal allocation in terms of financial resources.There is severe financial resource misallocation in China,and the prominent form of it is the misallcation of financial resources between different ownership of enterprises.The allocation of financial resources under China's financial system oriented by large state-owned banks and government intervention makes SOE enjoy too much financial resources,whereas private enterprises face poor condition in financing,causing the decline of return of the real economy,the fall of the private investment growth,transform of funds from real economy to virtual economy,and financial risks.Study of the influence of financial resource misallocation on enterprise performance helps to deeply understand the formation mechanism and influence to thoroughly solve the problem,improving the efficiency of financial resources optimize the mode of economic growth and reducing financial risks.By analyzing the impact of financial resource misallocation on enterprise performance,the paper concludes that financial resource misallocation will harm the performance of SOE and private enterprises directly from the one hand,and harm the performance of them through overcapacity,local government debt,real estate,and financial risks.In order to verify the above assumptions,this paper selects 2001-2016 data from A-shares listed industrial companies to make empirical study on the effect of the influence of financial resource misallocation on enterprises performance and seek whether there is differences between those influences.The results show that:first,the allocation of financial resources have significant difference among different ownership enterprises,SOE enjoy excess financial resources compared with private enterprises.Second,since 2008,the degree of financial resource misallocation increased in terms of the whole sample and SOE and private enterprises themselves,but the standard error of SOE decreased,since their financing costs became more balanced,while the standard error of private enterprises increased.Third,from the whole sample,there is a significant negative correlation between the misallocation degree of financial resources and firm performance.Private performance is negatively related to the misallocation degree of financial resources,and there is significant negative correlation between both ownerships,but there is stronger influence on the performance in private enterprises than that in SOE.Since listed enterprises have easier access to financial resources than non-listed enterprises,we can reasonably infer that in a large number of non-listed companies,misallocation of financial resources and the influence of it will be more serious,private enterprises,especially in small and medium-sized private enterprises.Finally,on the basis of empirical analysis,combined with previous research on China's financial resources misallocation,on how to resolve the problem of misallocation of financial resources and how to reduce the financial resources misallocation on enterprise performance influence,the paper puts forward the following policy suggestions:(1)Creating a level playing field and give private enterprises equal market position,opportunity and space,making market competition mechanism playing the decisive role of the in the allocation of resources,abolishing the monopoly of SOE and the govemment,accelerating the openness of finance to private enterprises,relieving the control of factors such as funds,reducing enterprise taxes and financing costs and increasing the return of private investment and arousing the enthusiasm of private investment.(2)Speeding up the reform of SOE,increasing the the transparency of SOE and the government,avoiding the misuse of funds and debt problems of SOE,breaking the problem of soft budget constraint,riding SOE out of the dependence of the government and state-owned banks.Firmly push forward the reform of SOE,(3)Speeding up the reform of state-owned banks,dealing with the bad debts of SOE on the balance sheet of commercial banks properly,avoiding government's undue control and intervention of financial institutions,breaking the barriers to enter into the financial sector,providing a level playing field,speeding up the inplementation of real interest rate marketization and giving banks the freedom to allocate their funds according to market prices.(4)Speeding up the construction of mull-layer capital market system and developing various financing channels,especially developing direct financing channel for small private enterprises to meet their need of funds of different size,quality and risks.(5)Paying attention to guard against financial risks.Changing the status of funds escaping from real economy to virtual economy,giving full play to the role of financial resources in serving the real economy,boosting the real economy,increasing the ability of real economy to attract funds from the one hand,and guiding the virtual economy to develop in a standardize and healthy way.trengthen the supervision and inproving the effect of supervision.