Non-controlling State Ownership?Debt Finance And Investment Efficiency

With the financial market development and the state-owned enterprise reform,non-controlling state ownership becomes more and more popular among China's publically listed private firms. The nature of the state ownership determines its natural relationship with the government, which makes enterprises have a relationship with government in equity level, the relationship is a kind of special form of political connection. Based on the relationship between non-controlling state ownership and corporate debt financing, the paper studies the influence of non-controlling state ownership on investment efficiency of private enterprises.First, this paper elaborates the theory of the political connection and enterprises investment, then, based on the data of Chinese listed enterprises from 2009 to 2013, we study the influence of non-controlling state ownership on the debt financing ability of private enterprises, and then investigate the influence of non-controlling state ownership on investment efficiency. The results showed that: firstly, non-controlling state ownership can improve the debt financing capacity of private enterprises; secondly non-controlling state ownership deepen the government's efforts to intervene in the enterprise, reducing the investment efficiency of enterprises, and performance as more over-investment; thirdly, after non-controlling state ownership in the private enterprises improved the ability to raise debt financing, non-controlling state ownership aggravate the excessive investment of enterprises; fourthly, when there are political participation of private entrepreneurs in private enterprises, the non-controlling state ownership is more likely to reduce the investment efficiency of enterprises. The results are not only has the inspiration for correctly understanding the role of political connection on the developing of enterprises in China, but also has a certain reference value for understanding the impact of non-controlling state ownership on corporate investment and financing.