Shareholder Attribute And Entity Enterprise Financialization

At present,the "hot" virtual economy and the "cold" real economy have emerged in China’s economy,and the real economy led by basic industries such as manufacturing and heavy industry has shown a trend of insufficient product core competitiveness,declining return on investment,labor productivity growth and total factor production rate,In the same period,the financial and real estate industries showed an obvious countercyclical upward trend.Driven by the capital profit motive,in order to make fast money,many entity enterprises ignore the resource advantages of their main business and flock to profiteering industries such as real estate and finance,resulting in the imbalance of the allocation structure of financial assets and operating assets of entity enterprises,which brings systematic risks to China’s economic transformation and upgrading.In view of the phenomenon of "de reality to virtual" of real enterprises,scholars have carried out a large number of studies from the perspectives of industrial policy uncertainty,institutional constraints and industry comparative profit differences,trying to reveal the pre influencing factors of the financialization of real enterprises,but the relevant studies have not reached a consensus.Based on the principal-agent theory,stakeholder theory and capital structure theory,after combing the enterprise control structure and enterprise decision-making process under the modern enterprise system,this paper believes that the financial asset allocation behavior of entity enterprises is affected by the results and dynamic changes of enterprise control.The ownership structure and the attribute of social network resources owned by shareholders are the main influencing factors of corporate control.Therefore,this paper studies the impact of shareholder attributes on the financial asset allocation decision of entity enterprises by focusing on the shareholder attributes and the impact of the dynamic change of corporate control on business decision-making.In this paper,the attributes of shareholders include the attributes of ownership structure and shareholders’ social resources.Firstly,ownership concentration,separation of two rights and multiple major shareholders are typical shareholder structure attributes,which can reflect the relative size and holding mode of voting rights of different types of shareholder groups in internal decision-making of enterprises from horizontal and vertical dimensions.Their positive impact on corporate governance decision-making has been confirmed by relevant literature.Secondly,chain shareholders can reflect the social resources and network relations linked by capital,which is an important attribute of shareholders’ network resources.After more than 30 years of development,chain shareholders,as the key node of information and resource circulation among enterprises,have an important impact on the business activities of enterprises.By virtue of its long-term practice in the capital market,chain shareholders have accumulated rich management experience and resource advantages,which will help to improve the governance level of invested enterprises,and then help enterprises better grasp investment opportunities and make scientific decisions.Therefore,this paper mainly solves the following problems: how does the heterogeneous attributes of shareholders such as ownership concentration,separation of two rights,multiple major shareholders and chain shareholders affect the financial allocation decision of entity enterprises? What is the impact mechanism? In the context of executive equity incentive,integration of two jobs,marketization process,analyst attention and equity nature,what impact does the above heterogeneous attributes of shareholders have on the financialization of real enterprises? Unfortunately,most of the existing studies on the pre factors of entity enterprise financialization believe that the external policy environment,institutional arrangements and industry profit differences are the main influencing factors of entity enterprise financialization.Only a few scholars explore the impact of internal governance factors such as the characteristics of internal executives and non controlling shareholders on enterprise financial asset allocation,and the research conclusion has not reached a consensus.Moreover,few scholars focus on the shareholder attribute and take the dynamic change of corporate control as the main line to study the impact of shareholder attribute on the financial asset allocation decision of entity enterprises.Based on the above questions,this paper attempts to uncover the impact of shareholder attributes on the financialization of real enterprises and the transmission mechanism,so as to provide theoretical support for curbing the phenomenon of "de reality to virtual" of real enterprises.Through theoretical analysis and normative analysis,combined with the facts of the financialization of real enterprises in China,this study studies the relationship between ownership concentration,separation of two rights,multiple large shareholders and interlocked shareholders and the financialization of real enterprises,in order to help improve and enrich the relevant pre factor theory of the financialization of real enterprises,and provide micro evidence for the phenomena of "industrial hollowing out" and "real sector financialization" in China’s economic operation,Provide decision-making basis for the government to guide the financial market to better serve the real economy,and finally realize the sound development of the real economy.On the basis of combing the relevant research literature of principal-agent theory,stakeholder theory and capital structure theory,this paper selects the annual sample observation data of China’s A-share listed companies from 2010 to 2019,and analyzes the sample data:(1)excluding financial and insurance listed companies and real estate listed companies;(2)Delete st and Pt listed companies;(3)Eliminate the observations of listed companies with missing data in the sample;(4)The continuous variables are windorized.The results show that:Ownership concentration significantly inhibits the financialization level of real enterprises.Under the condition that managers pay more attention to the development of ownership structure,managers can effectively avoid the risk of ownership structure and reduce the risk of ownership structure in the short term.Under the centralized ownership structure,the interests of the largest shareholder converge with the company and small and medium-sized shareholders,showing the supervision effect and less tunneling effect.They pay more attention to the future development of the main business of the enterprise,and invest more resources in high net present value projects around the development of the main business,so as to reduce the allocation of financial assets of real enterprises.There is a positive correlation between the quality of internal control and ownership concentration,indicating that the quality of internal control can inhibit executives and controlling shareholders from overriding internal control,realize the supervision and balance of various subjects and processes related to the interests of the enterprise,better restrict the self-interest behavior and shortsightedness of the management,and reduce the investment behavior of executives in high-risk and high-yield financial assets.The degree of separation of two rights significantly inhibits the level of financialization of real enterprises.Firstly,the greater the separation of the two rights,the more capable and motivated the ultimate controlling shareholders are to make financial decisions such as investment and operation conducive to their own interests,so as to obtain the private income of the control right;Secondly,the greater the separation of the two rights,the ultimate controlling shareholder "Prys" the company’s resources through the control right to grab private interests,which is far greater than the income of its cash flow right.Therefore,the ultimate controlling shareholder is more inclined to occupy the cash currency of the listed company through related party transactions,thus affecting the investment behavior of entity enterprises.Therefore,the higher the separation of two rights,the lower the level of cash flow that listed companies can use to allocate financial assets,so as to inhibit the financialization of real enterprises.Operating cash flow is the prerequisite for the ultimate controlling shareholder to seize private interests.The more abundant the operating cash flow,the more sufficient the resources of the listed company that the ultimate controlling shareholder can occupy through related party transactions.The ultimate controlling shareholder encroaches on the operating cash flow of listed companies,reduces the discretionary monetary and cash resources of listed companies,and thus reduces the level of financial asset allocation of listed companies.Therefore,the operating cash flow has an intermediary effect on the separation of two rights to inhibit the financialization of entity enterprises.Several major shareholders significantly inhibited the financialization level of real enterprises.Firstly,multiple large shareholders can reduce the behavior of seizing private benefits such as the occupation and hollowing out of minority shareholders by the first major shareholder.Secondly,multiple large shareholders can restrict the collusion between major shareholders and managers to a certain extent and effectively supervise the short-sighted behavior of managers in decision-making;Finally,the checks and balances among multiple large shareholders help shareholders cooperate with each other,share all kinds of effective information and avoid dictatorship.The supervision effect of the above three aspects urges the first largest shareholder and the management to pay more attention to the development of the main business of the enterprise and allocate more resources to the main business projects of the enterprise,so as to reduce the level of financial asset allocation.Therefore,multiple large shareholders inhibit the financialization level of entity enterprises.Multiple large shareholders can alleviate the agency cost problem between shareholders and management.When managers are faced with multiple internal and external pressures such as improving shareholder return,repaying enterprise debt,salary assessment and job promotion,managers usually more actively allocate financial assets with short investment cycle and high return,ignoring the main business investment of the enterprise,so as to make investment behavior that damages the long-term development value of the enterprise,Therefore,the higher the agency cost,the higher the holding level of financial assets.Multiple large shareholders exert supervision effect and share all kinds of effective information through mutual cooperation among shareholders,so as to avoid dictatorship,so as to reduce the first and second types of agency costs.Therefore,agency costs have an intermediary effect on multiple large shareholders to inhibit the financialization of real enterprises.Interlocked shareholders restrain the financialization level of real enterprises from the aspects of supervision and restraint,governance level and information and resource advantages.First of all,the interlocked shareholders have accumulated rich management experience and can implement more effective supervision over the managers’ business decisions.In the face of the managers’ decision to over allocate financial assets,the interlocked shareholders will not only carefully consider and oppose it,but even let the unqualified enterprise managers step down;Secondly,as the key node of information and resource circulation among enterprises,interlocked shareholders have accumulated rich management experience and information and resource advantages in the long-term practice of capital market,which is conducive to enterprises to better grasp investment opportunities and make scientific decisions.Therefore,interlocked shareholders promote the management and controlling shareholders of real enterprises to pay more attention to the main business development of real enterprises and reduce the financial level of real enterprises.Shareholder attributes inhibit the financialization of real enterprises,which is also affected by many scenarios.First of all,in the case of equity incentive in real enterprises,the consistency of interest objectives between interlocked shareholders and management is enhanced,which urges the management to pay more attention to the future development of the main business of the enterprise,such as enhancing the investment of innovative resources around the future development of the main business of the enterprise,so as to reduce the allocation of financial assets and inhibit the financialization of the enterprise.Secondly,the separation of two duties can exert the supervision effect,restrict the private interests of major shareholders and management,facilitate the board of directors to make more objective judgments on the business decisions and changes in the internal and external environment,and pay more attention to the long-term development of the main business of the enterprise.Therefore,in the case of the separation of two duties,the less resources the enterprise can use to allocate financial assets,so as to reduce the level of enterprise financialization.Third,in areas with high marketization process,the "external governance effect" played by the high marketization process has a significant impact on the inhibition of shareholder attributes and the allocation of financial assets of real enterprises.Fourth,the relationship between analysts’ concern and equity concentration is substitution.Analysts are concerned that it can regulate the shareholder attribute to inhibit the financialization of real enterprises through information mechanism,supervision mechanism and pressure mechanism.Finally,under China’s economic system,state-owned enterprises are more sensitive to national policies,actively respond to the national call,focus on the main business and reduce the financial level of real enterprises.The research contribution of this paper is mainly reflected in the following three aspects:first,based on the principal-agent theory,stakeholder theory and capital structure theory,this paper constructs the shareholder attribute analysis framework after combing the enterprise control structure and enterprise decision-making process.The analysis framework believes that the shareholder attribute is the basis of the company’s control right,which can well describe the structure of the company’s control right and the dynamic changes of the control right,fully reflect the impact of the changes of the internal and external business environment of the enterprise at different development stages on the enterprise’s business decision-making,and puts forward that the shareholder attribute is the main influencing factor of the enterprise’s financial asset allocation.Second,this paper uses the hypothesis of "heterogeneous rational person" to construct a new analytical framework.The analysis framework believes that the shareholder attribute can not only fully reflect the relative size and holding mode of voting rights of different types of shareholder groups in the enterprise,but also reflect the social resources and network relations linked by capital.Therefore,while examining the impact of the dynamic change of shareholder structure on the decision-making of enterprise financial asset allocation,it includes the social resources and relationship network of the capital link represented by shareholders,depicts the shareholder attribute from the dimensions of ownership concentration,separation of two rights,multiple large shareholders and interlocked shareholders,and presents the relationship and transmission mechanism between shareholder attribute and entity enterprise financial asset allocation.The introduction of social resources and relationship networks linked by capital enriches the connotation of shareholder attribute,the pre factor theory of entity enterprise financialization and the theory of enterprise control.Thirdly,through the analysis of the relationship between shareholder attributes and financial asset allocation,intermediary mechanism and regulation effect of entity enterprises,this paper provides a governance path to explore the "de reality to virtual" of entity enterprises,guides entity enterprises in the design of corporate governance by improving the quality of internal control,supervising operating cash flow,reducing agency costs and other internal governance means,and actively introduces third-party supervision,so as to promote China’s entity enterprises to focus on their main business,Improve the level of resource allocation.To sum up,shareholder attributes such as ownership concentration,separation of two rights,multiple large shareholders and interlocked shareholders have inhibitory effects on the financial allocation of real enterprises,while internal control quality,operating cash flow and agency cost have intermediary effects respectively.Executive equity incentive,integration of two duties,marketization process,analyst attention,equity nature and other scenarios can regulate the inhibition of shareholder attributes on the financialization of real enterprises.