Equity Diversification,Market Competition And Capital Allocation Efficiency

The impact of ownership structure on company efficiency has always been a fundamental issue in the company's financial theory.The traditional principal-agent theory focuses on the conflict between shareholders and managers due to the separation of ownership rights and business rights under a relatively decentralized ownership structure.A relatively concentrated ownership structure can alleviate such problem but may lead to principal-agent problems between major shareholders and minority shareholders.As an important mechanism to solve the above problems,balanced concentrated ownership structure have received extensive attention from the academic community.China's state-owned enterprises naturally have a"one big share"governance mechanism,and the low efficiency of state-owned enterprises' capital allocation is also a real problem to be solved.At present,more and more state-owned enterprises have introduced non-state-owned shareholders to form a diversified ownership structure.However,whether the participation of non-state-owned capital can really improve the efficiency of capital allocation of state-owned enterprises?What is the impact of the participation of non-state-owned shareholders on the efficiency of capital allocation of state-owned enterprises?Will the market competition environment have an impact on the role of non-state capital?There is no clear answer to these questions.Therefore,based on the research perspective of the impact of ownership structure on corporate investment and financing decisions,this paper takes A-share listed companies in 2008-2017 as the research object,and empirically tests the relationship between equity diversification,market competition and capital allocation efficiency.The main research questions are as follows:(1)Whether the introduction of non-state-owned shareholders can improve the efficiency of capital allocation in state-owned enterprises?(2)What is the relationship of the participation of non-state-owned shareholders on the efficiency of capital allocation of state-owned enterprises?(3)What is the impact of the external market competition environment on the relationship between non-state-owned shareholders and state-owned enterprises'capital allocation efficiency?The results of the paper are as follows:(1)Introducing non-state-owned shareholders such as private and foreign capital through equity diversification can effectively improve the efficiency of capital allocation of state-owned enterprises;(2)The higher the participation of non-state-owned shareholders,the more efficient the capital allocation of state-owned enterprises;(3)Compared with state-owned enterprises with relatively small market competition,the participation of non-state-owned shareholders has a more significant effect on the capital allocation efficiency of state-owned enterprises with a large degree of market competition.The innovations of this paper are as follows:(1)taking the shareholder,shareholder nature and capital allocation efficiency as the breakthrough of research,and implementing the research on capital allocation efficiency to the company level,considering both types of agency issues and paying attention to the external market environment;(2)Considering the endogeneity of equity structure variables,overcoming the bias of sample self-selection,and obtaining the net effect on capital allocation efficiency;(3)When measuring the participation of non-state-owned shareholders,the two dimensions of equity structure and high-level governance are considered.(4)Collecting data in combination with databases,listed company annual reports and financial websites to ensure data integrity and accuracy.As a branch of the"multiple shareholder" issue in academia,this paper not only enriches the research on the ownership structure and the efficiency of corporate capital allocation,verifies the impact of the nature of shareholding shareholders on corporate governance effects,but also summarizes the experience of "China Road",provides policy recommendations for reform of state-owned enterprises and provides some reference for specific issues such as "mixed effects","how to mix" and "how to deal with reforms" in the reform of state-owned enterprises.