Mixed Ownership Reform,Internal Control,and The Debt Cost

Mixed ownership reform is an important measure for the reform of state-owned enterprises at the present stage.Although it was started as early as the 1990s,it has not yet entered the deep-water zone of reform,until the Third Plenary Session of the 18th CPC National Congress in 2013,which puts mixed ownership reform at a new height,and the mixed ownership reform improves into the advanced phase.The mixed ownership reform since 2013 has been different from the past whether in terms of content and purpose,or in the implementation of specific policies.At present,most scholars still consider mixed ownership as a corporate attribute to study mixed ownership reform,which is more to study the ownership structure of enterprises than to study mixed ownership reform and its impacts.This is clearly not enough to study mixed reform and its impact.The development of mixed-ownership enterprises is the new norm of Chinese current economic development.Based on this background,our article selects the Shanghai and Shenzhen A-share listed state-owned enterprises during 2013-2016 as the research object,and defines whether the company implements mixed ownership reform or not by distinguishing the nature of the top five shareholders has changed since 2013 or not.We through using the dual-difference method(DID model)for empirical research,and using propensity score matching(PSM-DID),parallel trend test,and substitution of major variables as robustness tests to study the relationship among mixed ownership reform,internal control and debt cost.In addition,to further study,we divide industry and different state-owned capital ratios for grouping regression to study whether the relationship among mixed ownership reforms,internal control and debt cost will has different perform.Studying the relationship among mixed ownership reform,internal control and the debt cost,can make up the research gaps in related fields to a certain extent,and at the same time,it can reflect the policy effects of mixed reform implementation,and provide useful hints not only for the government to implement mixed reforms but also for state-owned enterprises take measures to the mixed ownership reform.The results shows that the mixed ownership reform has significantly increased the debt cost of state-owned enterprises,and the cost of debt has continued to grow with mixed reform going.The quality of the internal control of state-owned enterprises has been significantly improved with the reform of mixed ownership,and the improvement of the internal control can reduce the debt cost of the mixed state-owned enterprises.That is,good quality of internal controls can effectively prevent conflicts between mixed ownership reform and debt cost,and the regulation effect has a long-term effect.After using the PSM-DID,the parallel trend test,and replacing the main variables for robustness tests,these conclusions are still valid.The correlation among mixed ownership reform,internal control,and debt cost presentation will vary in different industries and different state-owned capital ratios.Based on the results of our paper,we believe that state-owned enterprises should unwaveringly adhere to the reform of mixed ownership.We put forward several policy recommendations:(1)Improve the introduction and withdrawal mechanism of non-state-owned capital.(2)Insist on the diversification of property rights and strengthen the internal control of enterprises.(3)Classify the state-owned enterprise mixed ownership reform.(4)Deepen market-oriented reforms and establish a more effective and fair capital market.