The Analysis On The Influence From Financial Misallocation To Corporate Operation

Ever since the establishment of market economy system in the 14th CPC National Congress,the economy has thrived.With the rapid development,there exposes many co-existing problems.The economy has now entered a new normalcy after a round of high speed growth,where the extensive development is unsustainable.A brand new and major theoretical conclusion was introduced in the 3rd Plenary Session of the 18th CPC Central Committee,that market should be "decisive" in resources allocation.It is an inevitable choice for China's economic development in this phase to change the development mode and further supply side reform.Finance is the core and blood of a modern market economy,and it is a production factor that has the function of configuring other resources.China's bank-dominant financial system and resources allocation under the Government's intervention have led to serious financial misallocation.Such misallocation will affect companies'performances,and even the sustainable development of the economy as a whole.It is,therefore,of vital importance to study the influence of financial misallocation on companies business operations as to understand China's financial misallocation,grasp transformation and upgrading of manufacturing industry and improvement of business operations.This article combined theories,cases and empirical analyses to study China's financial misallocation.It conducted researches in aspects of theoretical foundation,connotation definition,micro-mechanism,measurement,and transmission mechanism of influence on business operations,and discussed the background and cause of financial misallocation,its influences on business operations and how it influences.A multiple linear regression model is built on company scales,capability to growth,asset-liability ratio,solvency and total asset turnover to conduct empirical analysis on financial misallocation over business operations.And the model discussed whether the difference exists as to financial misallocation's influence over business operations of A-share listed manufacturing companies,by setting virtual variables such as ownership,industry and region,and dividing samples into state-owned and non-state-owned,regulated and non-regulated industry and east and west regions.It first run total sample regression,then regression comparison between groups,and robustness check.The results showed that there are positive and negative misallocation amongst listed companies,and there is explicit negative correlation between misallocation and business operations,where more serious the misallocation is,lower business performance gets,and the misallocation has different influences over business operations of listed companies according to their ownership,industry and region.In the final part,this article,on the basis of theories,cases and empirical analyses,concluded and proposed three policy suggestions to lower financial misallocation degree and improve companies performance-improve the financial market system and deepen reform in the financial sector;optimize conditions for manufacturing industry;improve companies' operations standard.