| At present,the world economy is in a complex and grim situation,with increasing instability and uncertainties,and the importance of giving full play to the potential of domestic demand and building a unified domestic market has become increasingly prominent.It is necessary to firmly grasp the strategic basis of expanding domestic demand,and strive to explore an effective path to form a new development pattern.On April 10,2022,the Central Committee of the Communist Party of China and the State Council officially issued the “Opinions on Accelerating the Construction of a Large National Market”,explicitly pointed out that,to build the national unified big market,it is necessary to “break local protection and market segmentation,open up key blocking points that restrict the economic cycle,and promote the smooth flow of commodity factor resources on a larger scale”.As a typical form of capital flow across regions,corporate trans-regional investment can not only take advantage of market opportunities and heterogeneous resources in various regions to achieve sustainable growth(Song and Huang,2014),but more importantly,the trans-regional flow of capital factors is crucial to achieve the optimal allocation of market resources and promote balanced development among regions(Lu et al.,2019).China has a vast territory and a large population,which provides favorable external conditions for enterprises to develop across regions based on the advantages of the domestic super-large market.However,in practice,the market segmentation problem occurs in the process of transition from planned economy to market economy(Young,2000;Yin and Cai,2001)have not been fundamentally resolved so far,especially in recent years,the market segmentation degree of capital factors has even has even increased rather than decreased(Liu and Kong,2021),which makes it difficult for enterprises to invest in other places.Therefore,how to help enterprises to break through the barriers of trans-regional investment is an important and urgent research topic under the new double-cycle development pattern.As important stakeholders and decision-makers of listed companies,large shareholders not only have sufficient motivation and ability to care about the long-term development of enterprises(Shleifer and Vishny,1986;1997),so as to actively participate in corporate decision-making,but also bring financial capital,social capital,investment experience,consulting services and other resources to the enterprise(Kang and Sorensen,1999).Especially under the institutional background of market segmentation widely existing among regions in China,the nonlocal large shareholders(NLS)have potential resources such as social capital from outside the company’s registered place,which may play an important role in breaking the barriers of trans-regional investment for enterprises.However,the existing literature mainly focuses on the corporate governance effect of non-controlling major shareholders on two types of agency problems under the research framework of principal-agent theory,but seldom considers the resource effect brought by the social capital and management experience owned by non-controlling major shareholders.In addition,the role of non-controlling major shareholders has not been extended to the trans-regional investment field of enterprises,and there is also a lack of attention to the heterogeneity of the geographical characteristics of large shareholders.In view of this,based on the special institutional background of China’s transition economy and starting from the regional characteristics of large shareholder,this paper investigates whether NLS can bring resource effect to enterprises,help enterprises break through the barriers of trans-regional investment,and thus promote the free flow of capital factors between regions.The “non-controlling large shareholder” examined in this paper refers to the non-controlling large shareholder of a listed company whose shareholding ratio exceeds 5% and comes from other provinces other than the company’s registration place.Specifically,this paper breaks through the research framework of traditional principal agent theory of large shareholders,and combines resource-based theory,institutional-based theory,social capital theory and information asymmetry theory to theoretically analysis and empirically examine the influence of NLS on enterprises’ trans-regional investment.This paper argues that the trans-regional investment experience,information advantage and social network of NLS can help enterprises reduce investment risk and institutional transaction cost in trans-regional investment,and promote enterprises to carry out trans-regional investment activities.This paper focuses on the capital investment activities of trans-regional subsidiaries and trans-regional mergers and acquisitions(M&A),and further tests whether the promotion of trans-regional investment by NLS can help enterprises achieve trans-regional development and improve trans-regional operating efficiency.The main conclusions of this paper are as follows:First,NLS can exert resource effect in trans-regional investment of enterprises that promote enterprises to set up trans-regional subsidiaries,and ultimately improve the efficiency of enterprise resource allocation.Chapter 4 in this paper uses the manually collected data on the location of large shareholders and the geographical distribution of subsidiaries of Chinese A-share listed companies from 2003 to 2019.The study finds that,first,NLS can promote companies to set up subsidiaries in other provinces,and this effect is more significant in areas with strong local protectionism and poor legal system environment;Second,the number of NLS has an incremental effect on the establishment of nonlocal subsidiaries and the inter-provincial scope of subsidiaries;Enterprises invest more in the origin of NLS;And when the NLS come from the regions with serious market segmentation,it can promote the capital flow to these regions.Third,the NLS can help enterprises to obtain more loans from other provinces,so as to promote enterprises to set up nonlocal subsidiaries.Fourth,NLS promote the establishment of nonlocal subsidiaries,which can realize the integration of resources in different places,improve the total factor productivity of enterprises,and improve the operating performance of nonlocal subsidiaries.Second,NLS can exert resource effect in trans-regional investment of enterprises,improve the probability of trans-regional M&A,and improve the performance of trans-regional M&A.Chapter 5 in this paper takes the M&A events initiated and completed by Chinese A-share listed companies from 2007 to2019 as the research sample,and manually collects the location data of M&A target companies from the Wind database.The study finds that,first,NLS can significantly increase the probability of trans-regional M&A;this effect only exists when the enterprises are non-state-owned enterprises,and this effect is more pronounced in areas with worse legal system environment and stronger local protectionism;Second,the number of NLS has an incremental impact on the probability of trans-regional M&A,and when the NLS come from regions with strong local protectionism and poor legal system environment,the probability of trans-regional M&A in these regions is higher.Third,NLS can help enterprises obtain more loans from other provinces,so as to promote enterprises to conduct trans-regional M&A activities.Fourth,when the enterprise has a large shareholder from the target firm’s province,the market performance and financial performance of the company’s trans-regional M&A are better.Third,the promotion of trans-regional investment by NLS can help enterprises achieve trans-regional development and improve trans-regional operating efficiency.Chapter 6 in this paper uses the regional distribution data of main business income from 2003 to 2019.The study finds that,first,NLS can significantly improve the trans-regional operating efficiency of enterprises,which is manifested by more trans-regional income and more trans-regional gross profit,and this effect is more significant in non-state-owned enterprises and areas with severe market segmentation,strong local protectionism and poor legal system environment.Second,the number of NLS has an incremental impact on the trans-regional operating efficiency of enterprises,and the trans-regional income and gross profit of enterprises in the origin of NLS are more.Third,NLS improve the trans-regional operation efficiency by promoting the trans-regional expansion of enterprise capita.Fourth,NLS help enterprises to establish contact with governments and obtain more purchase orders from governments in other provinces,that is,these enterprises obtain better trans-regional income sources.Compared with the prior literature,the research contribution of this paper mainly includes the following four aspects:First,from the perspective of NLS,this paper expands the literature on the micro-driving factors of enterprises’ trans-regional investment.Existing research on corporate trans-regional investment focuses on exploring the influence of external macro factors such as regional resource endowment,institutional environment differences,and local protectionism(Xia et al.,2011;Pan and Yu,2011;Wang and Miao,2015;Cao et al.,2019),the driving factors of enterprises’ trans-regional investment are less analyzed from the micro level(Liu et al.,2015;Li et al.,2019;Peng et al.,2020),and the role of non-controlling large shareholders in enterprises’ trans-regional investment decisions has not been considered.Due to the high shareholding ratio,NLS have the motivation and ability to exercise shareholder rights and participate in enterprise decision-making.In addition,large shareholders with different characteristics can bring different resources to the enterprise,which has a different impact on enterprise development.Based on the regional characteristics of non-controlling large shareholders,this paper shows that the potential resource advantages of NLS can promote enterprises’ trans-regional investment,thus providing a new micro-path for enterprises to break through the barriers of trans-regional investment.Second,this paper expands the research content and logical framework of non-controlling large shareholders in the field of corporate governance.Based on principal-agent theory,existing researches have focused on the corporate governance effects of non-controlling large shareholders on the two types of agency problems(Attig et al.,2008;Edmans et al.,2013;Jiang et al.,2018;Dou et al.,2018;Jiang et al.,2015;Chen,2019),and analyzed the impact of large shareholders on corporate innovation and financial asset investment under the framework of agency problem(Helling et al.,2020;Chen et al.,2021;Yu et al.,2021b),the resource effect brought by the social capital and management experience owned by non-controlling large shareholders is less considered,and the role of non-controlling large shareholders has not been extended to trans-regional investment of enterprises.Combining the viewpoints of resource-based theory and social capital theory,in the context of trans-regional investment of enterprises,this paper confirms the resource effects that social capital and management experience owned by NLS can play,which breaks through the boundary of the traditional governance effect of large shareholders,provides a new idea for the study of how large shareholders influence enterprise value,and also has enlightenment significance for enterprises to optimize the ownership structure.Third,this paper advances the research on the heterogeneity of large shareholders from the characteristics of regional attributes.Existing studies on the heterogeneity of large shareholders are often based on the different nature of shareholders’ ownership,different types of shares and different investment expertise(Attig et al.,2008;Chen et al.,2016;Clifford and Lindsey,2016;Hsieh and King,2019),seldom consider the heterogeneity of large shareholders in terms of regional attributes,and seldom systematically investigate the differential impact of heterogeneity of non-controlling large shareholders on corporate financial behaviors.Heterogeneity among large shareholders exists objectively.Heterogeneous large shareholders may have differentiated objective functions,which are reflected in different behavioral decisions and governance effects of major shareholders(Denis and Mc Connell,2003;Xu et al.,2006).More importantly,heterogeneous large shareholders may change the resource endowment of enterprises,thus affecting the long-term development of enterprises.Under the special institutional background of market segmentation widely existing among regions in China,this study demonstrates that NLS can help enterprises break through the barriers of trans-regional investment with their potential resources such as social capital and information advantage,thus providing a new perspective for the research on the heterogeneity of large shareholders.Fourth,this paper explores the micro-market mechanism that promotes the free flow of capital across regions.Enterprise trans-regional investment is a micro-process of capital flow across regions,and the trans-regional flow of capital factors is crucial to realize the optimal allocation of market resources and promote the balanced development between regions(Lu et al.,2019;Sun and Hou,2019).Using the research scenarios of trans-regional subsidiaries and trans-regional M&A,this paper reveals the important bridge role of NLS in trans-regional investment of enterprises,which not only provides a feasible solution for enterprises to break through the barriers of trans-regional investment,but also provides important enlightenment for government departments to break down inter-regional trade barriers by using micro-market mechanism under the new development pattern,so as to promote the free flow of factors. |
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