Study On The Relationship Among SOE Executives' Political Promotion Incentives,Financing Decisions And Corporate Performance

Corporate decision-making is a major issue concerning the survival and development of a company.Financing decisions also play a crucial role in corporate decision-making and it related to the sources of fund,the cost of fund and the efficiency of corporate management.The relationship between financing decisions and corporate performance has always been a hot topic in the academic community.In recent years,scholars have increasingly focused on the impact of the personal characteristics of senior SOE executives on corporate management and corporate performance.The personnel management system of China is unique.The executives of state-owned enterprises not only play the role of “ economic man ”,but also play the role of“political man”.Executives of state-owned enterprises not only have the interests of obtaining more pay and enjoying more on-the-job consumption.At the same time,there is a strong demand for the promotion of positions,especially the transformation from SOE executives to true government officials.Under the stimulation of this political promotion incentive,executives may change their decision-making behavior and ultimately act on corporate performance.Scholars began to study the relationship between senior political promotion and corporate performance based on China's personnel management system.At present,the academic community still lacks the consideration of the relationship between the senior SOE executives political promotion incentive and corporate performance from the perspective of executives' financing decisions.The mechanism of "black box" for corporate performance is also insufficient.Therefore,this paper studies the relationship between political promotion of senior executives and corporate performance from a completely new perspective-financing decisions.It not only has greater academic value,but also has certain practical value.This article first introduced the state of state-owned enterprises in China and the personnel appointment and removal system for senior managers in state-owned enterprises.Second,it introduced the theory of political promotion championships,incentive theory,principal-agent theory,and high ladder team theory.Then itsummarized and combed the literature.Including the classic literature on senior political promotion,financing decisions,and corporate performance.Further establish the theoretical relationship between the three.Finally,we use the relevant data of China's state-owned listed companies from 2009 to 2015 to conduct empirical tests.The tools used are mainly EXCEL 2010 and SPSS 12.0.After theoretical analysis and empirical tests,this paper finds that there is a significant positive correlation between executive promotion and asset-liability ratio,short-term debt ratio,and corporate performance,but there is an inverse relationship between corporate performance and asset-liability ratio of state-owned enterprises.This article from a new perspective-financing decisions,clarified the role of SOE executives political promotion of corporate performance,that is,different political promotion incentives will affect the state-owned enterprises' financing and then affect corporate performance.At the same time,this article also shows that political promotion incentives will encourage SOE executives to carry out more financing activities,which has a significant role in promoting the ratio of debt financing and short-term debt,but the impact of capital structure and debt maturity structure on the performance of SOEs.It is the opposite.The former will reduce the performance of state-owned enterprises,but the latter will improve the performance of state-owned enterprises.However,in general,the impact of debt maturity structure on corporate performance is greater than the effect of financing structure on corporate performance,which makes the impact of political promotion on corporate performance as a whole is positive.