State-owned Capital Operating Budget, Cash Dividends And Inefficient Investment

The State-owned capital operating budget is unique to China and is an innovation in the reform of China's budget management system.It is also an important tool to promote the reform of State-owned enterprises in China.It has achieved positive progress and results since its trial in 2007.State-owned capital operating budget has an important impact on China's improvement of the government budget system,the promotion of State-owned enterprise reform,the improvement of capital allocation efficiency,and the adjustment of the state-owned economic distribution structure.However,the effectiveness of State-owned capital operating budget requires not only top-down institutional arrangements,but also bottom-up budget practices and their connections starting with various State-owned enterprises at the grassroots level.Under the multi-agent agency state-owned assets management system,potential problems such as adverse selection behaviors and moral hazards caused by internal controllers based on their own goals for maximizing their interests may seriously affect the implementation of State-owned capital operating budget System,thereby affecting efficiency of state-owned capital allocation.Therefore,this article takes the improvement of the allocation efficiency of state-owned capital as the starting point,and studies the effect of State-owned capital operating budget on financial decisions at the micro level.Based on the above background,this article incorporates the State-owned capital operating budget,State-owned enterprise dividends,and investment efficiency into a unified analytical framework to verify whether the State-owned capital operating budget affects the State-owned enterprise's capital allocation efficiency,and if there is an impact Conducted through the intermediary variable of cash dividends,Investigate the internal logical mechanism that the State-owned capital operating budget affects the State-owned capital allocation efficiency.Select A-share state-owned listed companies from 2003 to 2017 as the treatment group and non-state-owned listed companies as the control group,construct a double-difference(DID)model to describe the net impact effect before and after the implementation of the state-owned capital operating budget policy,and then discuss the effect relationship between the variables in steps according to the mediation effect test model.Research shows:(1)The state-owned capital operating budget is significantly negatively related to the inefficient investment of state-owned enterprises.To some extent,it shows that the state-owned capital operating budget can restrain the problem of inefficient investment caused by the mismatch of state-owned enterprise resources and play a role in governing the inefficient financial decision-making behavior of state-owned enterprises effect.(2)The inefficient investment in state-owned enterprises is divided into sub-samples of over-investment and under-investment.The state-owned capital operating budget shows a negative correlation to over-investment or under-investment;the same is true only for local state-owned enterprises.However,the effect of the government-owned capital operating budget on the overinvestment in central SOEs is not obvious.(3)The state-owned capital operating budget of the inefficient investment group and the overinvestment group has a significant negative correlation with cash dividends,and the negative relationship between the underinvestment group is not significant;but the time variable and cash Dividend dividends are all significantly positively related,indicating that the dividend level of state-owned enterprises is increasing,but compared with non-state-owned enterprises,the operating budget of state-owned capital is slower to increase the level of cash dividends,and the dividend policy of state-owned enterprises still needs to be continuously improved and improved.(4)Cash dividends play a part of the intermediary transmission role in the state-owned capital operating budget's restraining inefficient investment;cash dividends also partially pass the state-owned capital operating budget's inhibiting effect on over-investment,but there is no such intermediary for insufficient investment effect.(5)SOEs are divided into central SOEs and local SOEs.As far as central SOEs are concerned,the role of cash dividends on the state capital operating budget negatively affects excessive investment.The intermediary role is not significant;while in local SOEs,this intermediary role remains perform obviously.Discussing only the central SOEs,the cash dividend part of the intermediary passed the governance effect of the state capital operating budget on insufficient investment;the test of this intermediary effect was not significant in local SOEs.Therefore,the logical relationship between the state-owned capital operating budget,cash dividend policy,and inefficient investment has been clarified.This article aims at the problem of low efficiency of resource allocation in State-owned enterprises.In the process of deepening the reform of State-owned enterprises and under the background of the implementation of State-owned capital operating budgets,this paper studies the relationship between the State-owned capital operating budget and the efficiency of State-owned capital allocation.It verifies the governance effect of State-owned enterprise dividends on the transfer of State-owned capital operating budget to inefficient investment especially over-investment,and compares the differences in these relationships between local and central SOEs.It is beneficial to alleviate non-efficiency issues such as investment alienation in state-owned enterprises and improve the efficiency of state-owned capital allocation.