| In recent years,the influence of social insurance system on corporate financial decision-making has been paid more and more attention by academic circles at home and abroad.The construction of China’s modern social insurance system has gone through a long and complex process of reform.As the important subject of social insurance contribution obligations,the enterprises are faced with constant changes in contribution burden and labor costs in the reform process,which will inevitably affect the behavior decisions of enterprises in business activities.Existing some literature focus on the social insurance payment and enterprise investment,the relationship between labor employment or innovation behavior,but ignored that the Chinese entity enterprise also presents the typical features of investment and financing maturity mismatch with high leverage.This feature not only deviates from the maturity matching theory proposed by Morris(1973),but also brings potential liquidity risks.Most of the explanations behind the causes of such liquidity risk are based on the passive choice of enterprises under the hypothesis of "financial repression",and there is no literature to systematically comb out the transmission mechanism and intermediate path of the influence of the change of social insurance contribution burden on the corporate liquidity risk at the theoretical level.Therefore,the comprehensive analysis of the impact mechanism and logical mechanism of social insurance contribution on corporate liquidity risk is helpful for us to fully understand the behavioral logic behind corporate investment and financing decisions.In particular,in the background of Chinese economy needs to be preventing the risks of resolving major financial,the further development of relevant research with social insurance contributions and corporate debt financing has important theoretical and practical significance for promoting structural deleveraging,and it will also help to optimize the allocation of financial resources and achieve high-quality economic development.This paper focuses on clarifying the internal relationship and logical mechanism between the change of social insurance contribution burden and corporate liquidity risk on the theoretical level based on the above background.According to the concept of liquidity risk focused in this paper,liquidity risk of Chinese entity enterprise mainly comes from the mismatch of investment and debt maturity,which reflected in the excessive configuration of short-term debt and radical tendency of investment and financing of "Long-term Investment with Short-term Financing".The changes in the social insurance contribution burden affect the enterprise’s investment strategy and the financing way by labour costs,thus influence enterprise liquidity risk.On the one hand,social inrurance contributions will affect corporate investment by changing the relative prices of capital and labor.Rising social insurance contributions will encourage enterprises to replace labor with machinery and equipment,and increase investment in fixed assets by raising labor costs.Meanwhile,the increase of social insurance contribution burden will also increase the degree of information asymmetry,which prompting enterprises to further increase "short-term debt and long-term investment" to reduce the loan cost(Custódio et al.,2013).On the other hand,the corporate investment will be negatively affected if the enterprise cannot completely transfer the cost of social insurance contribution to the employees,that is,the social insurance contributions will have a negative impact on investment by reducing internal cash flow(Rauh,2006).In addition,the reduction of internal cash flow reduces the principal-agent cost of enterprises which do not need to excessively rely on the supervision role of short-term debt on managers,thus extending debt maturities and reducing the tendency to "Long-term Investment with Short-term Financing".Therefore,the social insurance contributions have both positive and negative effects on corporate liquidity risk theoretically,and the final direction of impact will also depend on the size of these effects.Based on the above theoretical analysis,this paper further starts from the external cause of the change of actual payment burden of enterprises caused by the reform of social insurance system and carries out empirical verification.This paper mainly uses the "Database of All State-owned and Non-State-owned Industrial Enterprises Above Designated Size" established by the National Bureau of Statistics and the "Guotai’an" Listed Enterprise Database to conduct research.We focuse on the major social insurance system reform events in China since the 21 st century and reveal the actual effects of exogenous impacts of four different types of institutional changes on liquidity risks of micro enterprises including changes in social insurance collection and contribution institutions,provincial pension pooling,implementation of the Social Insurance Law and phased pension contribution reduction.Through empirical analysis,this paper found that enterprises’ responses to the change of social security contribution burden have changed significantly with the passage of time and the change of external investment environment,and there are significant differences in the channels through which the social insurance contribution burden affects the corporate liquidity risk.Specifically,the main research contents and conclusions of the empirical part of this paper are as follows:Firstly,in order to improve the efficiency of collection,alleviate the negative impact of aging on the balance of income and expenditure of the social security fund and ensure the sustainability of the operation of the social security fund,the reform of the social security collection system will be further deepened.Starting from the fact that the regional social insurance collection institutions changed in the early 21 st century,this paper focuses on the specific effect and internal mechanism of how the social insurance collection institutions change on the corporate liquidity risk through affecting the social insurance contribution burden.Based on the 1998～2005 database of industrial enterprises,this paper tests the relationship between the reform of social insurance collection institutions and the corporate liquidity risk by using DID method and instrumental variable method at the empirical level.The study finds that social insurance collection by tax authorities significantly increases the liquidity risk of regional enterprises after the reform of social insurance collection institutions.The reform of social insurance collection institutions has a stronger promotion effect on the liquidity risk with higher labor intensity because of higher elasticity of capital-labor substitution.The positive effect of social security collection institution reform on liquidity risk is mainly reflected in non-state-owned enterprises,smaller enterprises and enterprises with higher financing constraints from the perspective of different types of enterprises.The mechanism test shows that the change of social security collection institution mainly improves the liquidity risk of enterprises through "capital-labor substitution effect" and "information asymmetry effect".To be specific,the change of social security collection institutions mainly increases the cost of labor use by increasing the burden of enterprise social security payment,intensifies the motivation of enterprise capital to replace labor,and increases fixed asset investment.At the same time,the change of social security collection agency increases the debt financing cost of enterprises by intensifying the degree of information asymmetry,increases the dependence of enterprises on short-term debt,and thus improves the liquidity risk of enterprises.Secondly,this paper notes that the low level of pooling is an important reason for the false social insurance contributions and the fragmentation of social insurance fund management.Therefore,this paper uses the provincial pension pooling reform and 2005～2011 industrial enterprise database to identify the specific role and internal mechanism of the provincial pension pooling on enterprise liquidity risk by using the difference-in-difference method.The main findings of the study are as follows: The provincial level pooling of pensions has weakened the efforts of local governments in collection and contribution,lowered the actual contribution rate of the region,and significantly suppressed the liquidity risk of regional industrial enterprises.Heterogeneity analysis shows that provincial pension pooling has a stronger restraining effect on the liquidity risk of enterprises with higher labor intensity.Moreover,the negative effect of provincial pooling on liquidity risk is mainly reflected in non-state-owned enterprises,smaller enterprises and enterprises with higher financing constraints.In addition,the mechanism test shows that the provincial pension pooling enhances the motivation of enterprises to increase labor employment and reduces fixed capital investment by reducing the burden of enterprises’ pension insurance contributions.At the same time,the reduction of pension contribution burden after provincial pooling improves the operating leverage of enterprises,reduces the degree of information asymmetry and debt financing cost of enterprises,which increases the proportion of long-term debt and thus reduces the liquidity risk of enterprises.Thirdly,as the supporting law of China’s modern social insurance system,the Social Insurance Law not only strengthens the protection of workers’ rights and interests,but also plays a decisive role in standardizing the rights and obligations of various subjects in the social security system.Therefore,taking the implementation of the Social Security Law in 2011 as a quasi-natural experiment,this paper studies the specific impact of the increase of payment burden after the implementation of the Social Security Law on the liquidity risk of enterprises.Based on the sample of non-financial A-share listed enterprises in Shanghai and Shenzhen stock markets from2007 to 2017,the results of this paper show that the implementation of the Social Security Law has significantly inhibited the tendency of labor-intensive enterprises to invest in short bonds and long bonds,and reduced their liquidity risks.Moreover,this inhibitory effect is more obvious in private enterprises,enterprises with stronger financing constraints,lower ownership concentration and higher level of management incentives.The mechanism test shows that the implementation of the Social Insurance Law has not produced an obvious effect of capital replacing labor,but has affected the liquidity risk of enterprises through "cash flow effect" and "agent cost effect".The implementation of the Social Insurance Law has improved the labor costs of enterprises and reduce the enterprise free cash flow,the enterprise respond to liquidity risk by increasing cash holdings and reducing fixed asset investment.At the same time,the implementation of the Social Insurance Law also reduces the principal-agent cost,extended the debt maturity,thereby reducing the tendency of "Long-term Investment with Short-term Financing".Finally,combining with the current China’s macro level "Tax and fee reduction" policy guidance and speed up the reality trend to reduce the financial burden of enterprises,this paper probes into actual effect of the policy of reducing nominal contribution rate,namely whether the policy of reducing nominal contribution rate can really reduce the actual burden of social insurance contribution of enterprises.On this basis,we use the difference-in-difference method to identify exogenous shock effect of reducing contribution rate policy on liquidity risk of the enterprise based on the Shanghai and shenzhen A-share non-financial listed companies sample from 2012 to 2019.The results show that although the phased reduction of pension contribution rate policy significantly reduces the actual contribution burden of enterprises,the phased reduction of pension contribution rate policy also significantly increased the tendency of enterprises to "Long-term Investment with Short-term Financing" and increased liquidity risks.The mechanism test shows that phased reduction of pension contribution rate policy does not promote enterprises to increase labor employment with the rigidity of wages,but affects corporate investment and debt decisions by changing the free cash flow,namely phased reduction policy raise the level of the enterprise internal cash flow mainly by reducing the enterprise actual contribution burden,enhance enterprise long-term investment inclination,and shortened the debt maturity by raising the principal-agent cost,thus improve the liquidity risk of the enterprise.From different types,the effect of phased reduction policy on liquidity risk is more obvious in private enterprises and enterprises with higher labor intensity,smaller size,higher ownership concentration and lower management incentive level.Compared with existing studies,the marginal contribution of this paper is mainly reflected in the following aspects: First,this paper enriches the researches of the social insurance contribution and corporate behavior,most of the existing literature discussed the impact of social insurance contribution on corporate investment,labor employment and wages,innovation and other aspects,but no literature systematically combed out the transmission mechanism and intermediate path of social insurance contribution on enterprise liquidity risk from the perspective of enterprise debt decision-making at the theoretical level.Therefore,a comprehensive analysis of the influence mechanism and logical mechanism of social insurance contribution on corporate liquidity risk can help us fully understand how entity enterprises respond to exogenous cost changes and provide theoretical reference for in-depth understanding of the behavioral logic behind corporate investment and financing decisions.Second,this paper broadens the research perspective on the causes of corporate liquidity risk.As for the reasons for the high proportion of "Long-term Investment with Short-term Financing" or short-term debt of Chinese entity enterprises,most of the current researches carry out empirical analysis from the perspectives of financial environment,monetary interest rate policy,financing constraints and management characteristics.From the perspective of social insurance system change,this paper attempts to explore how the change of social insurance contribution burden affects investment and financing decisions,thus providing a new explanation for the causes of liquidity risk of Chinese enterprises.Third,under the dual background of the challenge of aging population and the increasing demand of enterprises to cut taxes and administrative fees,the effective and comprehensive evaluation of historical reform of the social insurance systemt,and accurate identification of their effects on the micro corporate investment and financing behavior and the transmission mechanism has important practical significance for us to further deepen the reform of social insurance system in the future.This paper empirically examines the impact of previous institutional changes such as changes in social insurance collection institutions,provincial pension pooling,implementation of the Social Insurance Law and phased reduction of pension contribution rate policy on the actual contribution burden of enterprises,as well as their specific effects on the liquidity risk through lots of detailed enterprise-level data.This article provides a basis for the current direction of social insurance system reform,such as the unified collection of social insurance premiums by tax authorities,the implementation of national pension pooling and the reduction of social insurance rates,and also provides ideas and references for the country to formulate more effective and detailed supporting policies. |
