Research On The Effect Of PPP Project Off-balance Sheet Financing On The Financial Consequences

The PPP model in the field of infrastructure construction in our country is being popularized and applied,and the high debt problems of the construction industry is generally restricted the investment and financing business,many construction enterprises hinders the enterprise development and the transformation and upgrading,and the PPP project investment,long cycle,if by social capital control SPV company,as the project construction,the social capital of the consolidated debt capital increased rapidly,its leverage will be rising,with no doubt this supply side structural reform in our country and the policy guidance of deleveraging,accused of liabilities.Therefore,at present,private capital has a strong demand for off-balance sheet financing when investing in PPP projects,while state-owned enterprises,especially central enterprises,have even greater demand for off-balance sheet financing.Most of the existing studies on off-balance-sheet financing of PPP projects focus on capital arrangement,operation mode and operation specification,and most of these studies remain at the theoretical level.The author believes that one of the reasons is the lack of attention to the study,and the other is the difficulty in obtaining relevant data.Based on relevant theories,this paper briefly introduces the concepts of off-balance sheet financing for PPP projects and corporate financial performance.The relationship among corporate financing structure,PPP project off-balance sheet financing and corporate financial performance is introduced.Based on the previous research results and the basic theory of financing structure,this paper theoretically analyzes how the off-balance-sheet financing of PPP projects in China is affected by the corporate financing structure in the context of deleveraging.By using inductive analysis and case analysis method,this paper discusses whether the increase of off-balance sheet financing can improve the financial performance of enterprises.It is revealed that the influence of off-balance sheet financing of PPP projects on corporate financial performance is mainly reflected in the improvement of corporate solvency,profitability and operational capacity.Starting from the operation lease,data of all PPP concept stocks listed from 2014 to 2018 were selected as samples for empirical test of the above theoretical analysis,and the results basically verified the theoretical analysis carried out in this paper.Finally,through theoretical and empirical studies,the paper draws the following conclusions: on the one hand,in order to save financing costs,improve cash flow,cater to the deleveraging policy,and conceal the true financial situation,listed companies with high asset-liability ratio in the financing structure are more inclined to engage in off-balance-sheet financing of PPP projects.On the other hand,off-balance-sheet financing of PPP projects will not improve corporate financial performance.The empirical results show that the off-balance-sheet financing of PPP projects can strengthen the long-term solvency and operating ability of enterprises,but cannot improve the profitability,short-term solvency and development ability of enterprises,and has a certain degree of negative impact.At the end of this paper,some policy Suggestions are put forward according to the research conclusion.Firstly,the social capital should improve its financing structure to avoid off-balance sheet financing of PPP projects,or weaken the negative impact of off-balance sheet financing of PPP projects on the financial performance of enterprises by strengthening its own strength.Second,by strengthening the disclosure of accounting information,improving the quality of accounting information,improving the risk management system and other ways to play the role of corporate governance,to avoid the long-term solvency of many enterprises with a high leverage ratio to choose this financing method too much,so as to ensure the overall interests;Third,strive for a reasonable return on investment,improve profitability,and prevent the poor financial performance from severely hurting the willingness of social capital parties to participate in PPP projects;Iv.The government should strengthen the supervision of off-balance sheet financing of PPP projects from the two aspects of off-balance sheet financing motivation and off-balance sheet financing information transparency,and control off-balance sheet financing of PPP projects.