Embedded Governance Of State-owned Party Organizations,CEO Power And Business Performance

State-owned enterprises,whose operating performance reflects the efficiency of the use of state-owned assets and is related to the long-term stability of the country,are the pillars of national economic development and the important carrier of national macro-control objectives.In 1978,the reform and opening-up under the leadership of the Communist Party of China came into being,and the Party had an impact on the reform of most enterprises.Over the past 40 years,the reform of state-owned enterprises has gone through four stages,and now it is in the fifth stage-the establishment of a modern enterprise system.Compared with the western capitalist countries,the biggest characteristic of our state-owned enterprises is that they have the leadership of the Communist Party of China and integrate the advantages of the Party into corporate governance.Whether the Party organizations of state-owned enterprises can effectively participate in corporate governance is very important,which is related to whether they can use reasonable and effective means to ensure the preservation and appreciation of state-owned assets,improve the economic efficiency of state-owned enterprises,and urge executives to use their power.Based on this,this paper studies the impact of Party organization embeddedness on business performance with the breakthrough point of state-owned enterprises' operation status,combined with political intervention theory and principalagent theory,and then explores the intermediary role of CEO power between Party organization Embeddedness and business performance with the theory of high-echelon and management power.Firstly,this paper combs and integrates the literature related to research issues.In the theoretical part,it introduces the research status of the party organization's participation in corporate governance,CEO power and corporate performance at home and abroad,and makes a literature review.Secondly,the article innovatively explores the mechanism of the Party organization's influence on business performance,which is instructive to clarify the change of CEO's status and power after the Party committee is embedded in corporate governance.Then,this paper takes the A-share listed state-owned enterprises from 2007 to 2016 as samples,uses the principal component analysis method to construct CEO power,and establishes a multiple regression model.Subsequently,the empirical study examines the impact of "two-way entry,cross-appointment" on business performance and the underlying mechanism.In the further study,the difference between the effect of "strictly administering the Party" at the 18 th National Congress of the CPC and the embedded governance of the Party organization under the situation of Classified Governance of state-owned enterprises is discussed.Finally,PSM-DID method is used to test the robustness.The research finds that the degree of embedding the board of directors and management of Party committees in state-owned enterprises has a positive effect on the business performance of enterprises;compared with the two positions of chairman and Secretary of Party committees,the two positions of concurrent companies have higher business performance.At the same time,CEO power plays an intermediary role between the embedded governance of Party organizations and corporate performance,that is,the two-way entry and cross-appointment between Party organizations and supervisors improve CEO power,while the increase of CEO power promotes the performance of state-owned enterprises.Based on theoretical analysis and empirical results,this paper puts forward several policy recommendations,including improving laws and regulations to promote party building in state-owned enterprises,co-existence of supervision and incentives for CEO power,establishment of a "double-evaluation system" for senior executives,and the degree of embeddedness of Party organizations according to the classification of state-owned enterprises,and so on.The paper also summarizes the possible shortcomings of the study,and gives some suggestions for the follow-up study.The research results provide a theoretical basis for optimizing the relationship between the Party and enterprises,reforming the state-owned enterprises and correctly treating the CEO's power.