Research On The Impact Of State-owned Enterprises’ Party "Cross-Employment" On Financial Performance

State-owned enterprises(SOEs)are an important part of national economic development.In the current process of deepening the reform and development of SOEs,adhering to the leadership of the party,embedding party organizations in the corporate governance structure,and clarifying the legal status of party organizations to participate in corporate governance are important features of national modern corporate system.This institutional arrangement can effectively solve the "inside control problem" caused by the increased autonomy of production and management decision-making by the SOE managers,which has been concerned by the academic circles and the industry in recent years.Therefore,an in-depth study of the ways in which party organizations participate in corporate governance and its economic consequences can not only provide a basis for decision-making in the reform and development of enterprises,but also provide theoretical support for party organizations to improve governance efficiency.This dissertation chooses China’s A-share state-owned listed companies from 2007 to 2019 as the sample,and conducts an empirical study on the effects of two types of the party"cross-employment" on financial performance and their mechanisms.The results show that the secretary of the party committee(SPC)concurrently serving as the chairman(the first type of party "cross-employment")does not have a significant impact on the company’s return on total assets(ROA),but the deputy SPC concurrently serving as the chairman or general manager or the chairman of the supervisory board(the second type of party "crossemployment")has a significant and positive impact on SOEs’ ROA.The main empirical findings of this paper hold after using alternative proxies and considering potential endogeneity issues.Further analysis shows that the second type of party "cross-employment"significantly improves the employees’ pay-performance sensitivity in SOEs,which can play a role in motivating employees to work hard to improve performance.Moreover,the significant and positive effect of the second type of party "cross-employment" on ROA mainly exists in central SOEs and the sub-sample with lower stakes of major shareholders.In addition,this dissertation also finds that the positive impact of the second type of party "cross-employment"on the total asset turnover of SOEs is mainly manifested in a significant increase in the fixed asset turnover.From the perspective of cross-employment of party members and directors,supervisors,and senior managers,this dissertation studies the impact of two types of party "crossemployment" on the financial performance of SOEs,and analyzes the effect of "crossemployment" of party organizations,and its possible mechanisms and heterogeneity of such an effect.The dissertation enriches the related researches on the governance of party organizations and corporate governance in SOEs,and has important theoretical and practical significance in the context of the new round of restructuring of SOEs.