The Influence Mechanism Of Party Organization Integration On State-owned Enterprises’ Risk Taking

The integration of the party organization into the corporate governance of state-owned enterprises is a unique corporate governance model developed based on the governance situation with Chinese characteristics.As the main force holding the lifeline of our national economy,state-owned enterprises provide material support for the improvement of China’s comprehensive national strength and the ruling of the Communist Party of China.In 2012 our country Ministry of Finance and securities regulatory commission issued the joint statement of expanding the scope of the enforcement of the system of internal control,the announcement said: internal control as an important internal governance mechanism,procurement,production and sales of enterprise has a number of operating activities such as role,enterprises should further implement internal control specification in order to promote the development of enterprise is good.In addition,risk taking of state-owned enterprises is also a hot topic favored by many scholars.Business activities of enterprises are reasonable judgments and choices of risks and benefits,while risk taking of enterprises reflects the attitude toward risks in the decision-making process of enterprises.Especially since the beginning of the 21 st century,with the accelerating economic globalization and the rapid development of digital applications such as artificial intelligence,big data and 5G,these tremendous changes in the external business environment have brought new opportunities for the development of state-owned enterprises,but also hidden unprecedented challenges of uncertainty.In this situation,how to seize the opportunity and take into account the risk management is very important for the preservation and appreciation of state-owned assets.Based on principal-agent theory,embedment theory and behavioral decision-making theory,this paper deeply analyzes the relationship between corporate governance and risk taking in state-owned enterprises when the party organizations are integrated into state-owned enterprises.First of all,this paper divides the party organization into three forms: the party organization into the board of directors,the party organization into the board of supervisors,and the party organization into the management.On this basis,it constructs the relationship model among the party organization into the corporate governance,the quality of internal control,and the enterprise risk taking,and puts forward the corresponding research hypothesis.Secondly,we found the data of 280 listed state-owned enterprises from 2010 to 2019 mainly through Guo Tai ’an database and Dibo database,and used STATA15 software to sort out the data and make empirical analysis,so as to verify the theoretical model constructed in this paper.Finally,this paper finds that:(1)The integration of the party organization into the corporate governance of state-owned enterprises can effectively reduce the level of enterprise risk taking;(2)The integration of the party organizations into the corporate governance of state-owned enterprises can effectively improve the quality of internal control of enterprises;(3)The improvement of internal control quality can reduce the risk taking level of state-owned enterprises;(4)The quality of internal control plays an intermediary role between the integration of the party organization into the corporate governance of state-owned enterprises and the risk taking of enterprises;(5)It is further found that the inhibiting effect of the party organization on the risk taking of state-owned enterprises is more realized by integrating into the board of directors and the management.The promotion of the quality of internal control by the party organization is also realized by integrating into the board of directors and the management.This study has a certain guiding significance to improve the corporate governance level of state-owned enterprises and improve the status quo of risk taking.In addition,the research on the risk control of state-owned enterprises from the perspective of the integration of the party organization is also of great theoretical value for the research of corporate governance.