Research On The Impact Of Founder's Social Capital And Family Excess Control On Excessive Debt Of Enterprises

In recent years,the motivation of the listed family enterprises in China to seek expansion and transformation is increasing.However,in the face of enormous financial pressure,many of them still seek further development through over-investment,resulting in excessive debt.There is a close relationship between the excessive debt behavior caused by enterprise investment preference and the allocation of control rights.Family firms have a natural preference for control,which is embodied in the excess control of shareholders' meetings,board of directors and managers through pyramid structure,family members' participation in management,cross-shareholding and other ways.So whether allocations of excess control enhance or reduce the level of excessive debt?In addition,as the founder of the family firms,can its social capital alleviate the excessive debt level of the business?In view of this,this paper chooses the listed family firms in small and medium-sized boards from 2014 to 2017 as the research object,studies the relationship among founder's social capital,excess control and excessive debt of family firms,and further analyses the relationship between excessive debt and corporate performance.This paper expresses the founder's social capital by assigning and summing up his political,financial connections,and business connections and divides the family excess control into three dimensions of shareholders' meeting,board of directors and managers,and uses the degree of deviation of the actual asset-liability ratio from the target debt ratio to measure the level of excessive debt,so as to fully and deeply study the relationship between the above three.In addition,this paper calculates comprehensive performance indicators with 15 basic indicators by the factor analysis method,which makes the study of enterprise performance more comprehensive.On the basis of reviewing a large number of domestic and foreign literatures,this paper makes an analysis and summary of relevant theories and puts forward specific hypotheses.Through empirical research,the main conclusions are as follows:firstly,the strengthening of excess control of family shareholders will will enhance the level of excessive debt of enterprises;excess control of the family board and excess control of the manager will help alleviate the excessive debt of the company.Secondly,the richer founder's social capital is,the higher level of excessive debt,and the founder's social capital will further enhance the effect of excessive control of family shareholders' meeting on excessive debt and weaken the mitigation effect of excessive control of board of directors on excessive debt,but its impact on the relationship between managers' excess control and excessive debt is not significant.Thirdly,the improvement of the level of excessive debt will lead to the decline of corporate performance,and the interaction between excessive control of shareholders' meeting and excessive debt is negatively correlated with corporate performance.The interaction between excess control of board of directors and excessive debt is positively correlated with family firms' performance,While the interaction between excess control of managers and excessive debt has no significant impact on corporate performance.Through the above research and analysis,this paper holds that family enterprises should weaken the excess control of shareholders' meeting appropriately and select some competent family members to enter the board of directors and management level,which is conducive to keeping the capital structure in a reasonable state.Family enterprises should also use the social capital established by founders reasonably and can not rely on their abundant social capital to seek rapid expansion or blindly borrow debts,resulting in enterprises out of the normal and stable development path.At the same time,enterprises should broaden the financing channels by increasiny the proportion of equity financing appropriately,so as to avoid excessive debt level too high and give full play to the governance role of debt operation to improve enterprise performance.In addition,relevant departments should strengthen the reform of financial system to create a good financing environment for family enterprises.