Excessive Appointment Of Directors By Non-state-owned Shareholders And Financialization Of State-owned Enterprises

At present,China’s economy has entered a new normal development stage,and the development of the real economy is facing unprecedented risks and pressures.Indicators such as return on investment of real enterprises and total factor productivity generally show a downward trend.In contrast,with the implementation of financial reform,the development of the financial industry has made great achievements.In order to pursue higher returns,many enterprises are involved in the financial field one after another.What’s more,they try to make up for the losses in the main business by earning profits in the financial field,so as to achieve the purpose of improving their business performance.Therefore,a large amount of capital flows into the field of virtual economy and forms "idling" in this field,which eventually leads to the departure of funds from the real economy and the squeezing of enterprises’ main business,which is also an important reason for the widespread phenomenon of financialization in enterprises.Since the mixed ownership reform,China has made a major breakthrough.In the future,we will continue to "actively develop the mixed ownership economy" and encourage the cross-integration of different ownership capitals,especially non-state-owned shareholders to participate in the stock market.This provides an opportunity for non-state shareholders to sit on boards and participate in the governance of state-owned enterprises.However,until now,the board of directors of state-owned enterprises still exists in the absence of the problem,the major shareholders "one word" phenomenon makes it difficult for the board members to play their due responsibilities and obligations.At this time,if non-state-owned shareholders can hold some real power,they will be able to participate in the operation and management of state-owned enterprises in a substantive way,enhance their supervisory role over the management,and effectively protect the interests of enterprises and their legitimate rights and interests.The excessive appointment of directors by non-state-owned shareholders provides a way to solve the above dilemma,which is essentially non-state-owned shareholders strengthen the governance of state-owned enterprises by controlling the decisions of the board of directors.Based on the perspective of mixed ownership reform,this paper takes A-share state-owned listed companies in Shanghai and Shenzhen from 2009 to 2020 as samples,and based on the logic of non-equivalence of equity and control right,tests the influence of over-appointment of directors by non-state-owned shareholders on the financialization of enterprises.On this basis,the mediating effect of main business performance and resource allocation efficiency in the relationship between the two is further discussed.In robustness test,this paper adopts a series of methods such as alternative variable measurement,instrumental variable and changing model setting to ensure the reliability of the above research conclusions.On this basis,this paper further analyzes the influence of different levels of industry competition,different levels of government intervention,different analyst attention and different investment environments of over-appointment of directors on the financialization of state-owned enterprises.The results show that:(1)When non-state-owned shareholders appoint excess directors to the board of directors,that is,when the control right of non-state-owned shareholders exceeds the equity,the financialization level of state-owned enterprises can be effectively suppressed.However,simply appointing directors cannot effectively inhibit the financialization of state-owned enterprises.(2)The appointment of excess directors by non-state-owned shareholders has an effect on the level of financialization of enterprises by enhancing the performance of enterprises’ main business and improving the efficiency of resource allocation.(3)There are significant differences in the effect of over-appointment of directors among different types of state-owned enterprises.Specifically,the inhibition effect of non-state-owned shareholders’ appointment of excess directors on the financialization of state-owned enterprises is more obvious in the state-owned enterprises with weak government intervention,high competition,weak external analysts’ attention and good investment environment.The innovations of this paper are as follows: Firstly,it is innovative in the perspective of research.From the perspective of unequal allocation of equity and control rights of non-state-owned shareholders,this paper includes the over-appointment of directors by non-state-owned shareholders and the financialization of state-owned enterprises into the same research framework,which has important reference value for improving the level of corporate governance.The second is the innovation in the research content.According to the internal and external environment characteristics faced by state-owned enterprises,this paper divides them into groups to explore the influence of different levels of competition in industries,different levels of close relationship between government and market,different analyst attention and different investment opportunities,so as to provide reference for promoting capital integration between different ownership systems and preventing financial risks.