Financial Misallocation And Corporate Systematic Risk

Since the start of the open-door policy,China's economy has made remarkable achievements,walking in the front end of the world economy,however,the problems in the rapid development of the economy are also increasingly prominent.Due to the late establishment of the market-oriented economic system in our country,and the fact that the credit market is dominated by state-owned commercial banks,there is a serious phenomenon of financial misallocation in our country.The phenomenon of financial misallocation is characterized by the great differences in production efficiency and financing ability between enterprises with different ownership,especially state-owned enterprises and private enterprises.The financial misallocation between state-owned enterprises and private enterprises is not only an important cause of the derogation of China's total factor productivity,but also may be an important factor leading to the accumulation of systemic risks.However,there is no systematic and in-depth study on the latter at present.This paper focuses on the core question of whether financial misallocation between enterprises with different ownership,especially between state-owned enterprises and private enterprises,will lead to an increase in the systemic risk of enterprises.It is of great significance for the theory of financial misallocation and to realize stable economic growth.In this paper,the relationship between financial misallocation and corporate systemic risk is studied by analyzing the theoretical mechanism,practical characteristics and empirical model.Firstly,this paper point out the background,the goal,the significance,research methods and content of this research,as well as summarizes the existing literature of relevant scholars.Secondly,it introduces the theory of financial misallocation and the theory of corporate systemic risk.Thirdly,it analyzes the realistic characteristics of the impact of financial misallocation on corporate systemic risk.Combined with the current economic situation in China,this paper analyzes and studies the financial misallocation phenomenon based on ownership perspective and the impact of financial misallocation on the systemic risk of enterprises.Then,a multivariate linearregression model was constructed through the selection of samples and the setting of variables.The data from the company level of China-Shenzhen A-share listed companies during the period of 2010-2016 was used for empirical analysis and research.We use the stato software stata to regress the panel data of the whole sample to analyze the relationship between financial misalignment and the systemic risk of the company.Then we perform group regression processing on the overall sample and divide it into two groups: state-owned enterprises and private enterprises according to the perspective of ownership.Exploring the differences between the effects of systemic risks on the financial misallocation of listed companies with different ownership systems.Finally,the cross-items of financial misalignment and ownership were added to explore the correlation between ownership financial misallocation and corporate systemic risk.A regression analysis of the relationship between financial misallocation and corporate systemic risks shows that: First,there is a significant positive correlation between financial misallocation and corporate systemic risks,that is,the more serious the financial misallocation,the greater the systemic risk.Second,we have divided the overall sample into two groups,state-owned enterprises and private enterprises,and conducted regression analysis.They both are facing a positive correlation between financial misallocation and corporate systemic risks,but the impact of financial misallocation on the systemic risk of state-owned enterprises is more influential than that of private enterprises.Third,we added the cross terms of financial misalignment and ownership in the model,and found that the cross-terms of financial misallocation and ownership have a significant positive correlation with the systemic risks of the company.In other words,ownership discrimination,which is the main manifestation of financial misallocation,is an important factor that leads to the rise of corporate systemic risk.Due to the existence of ownership discrimination in our country's enterprises,the systematic risk of enterprises caused by financial misallocation has been increased.Finally,regression analysis was carried out that the government's intervention in the credit market and the unreasonable allocation of financial resources in the state-owned banks have led to serious financial misallocation in China,which has caused the rise of systematic risks in China's enterprises.This paper proposes some ideas and suggestions for the current phenomenon of financial misallocation and how to reduce the occurrence of systemic risks.First,the government should attach great importance to the phenomenon of financial misallocation,and improve the existence of ownership discrimination in China's financial market,and adjust the unreasonable allocation of credit markets as soon as possible.Second,China's financial market is far from perfect.In China's financial structure,it mainly relies on indirect financing of banks,and the proportion of direct financing is very low.Therefore,it is necessary to strengthen and improve the financing functions at different levels in the market.Third,a sound credit system and information sharing platform should be established.