Research On The Impact Of Bank Loans Of State-owned Zombie Enterprises On Corporate Value And Shareholders' Interests

With China's economy entering the new normal of supply-side structural reform,zombie enterprises have gradually become a hot topic.In the absence of ownership of state-owned assets in China,as well as incomplete investor protection mechanism and judicial system,conflicts among stakeholders of state-owned zombie enterprises are more prominent.How to properly resolve the relationships between the various stakeholders of zombie enterprises is an important issue when cleaning up and handling zombie enterprises.Based on the zombie state-owned enterprises from 2011 to 2017 as sample,this paper studies the impact of zombie corporate bank loans on the company's value and the interests of major shareholders,in order to demonstrate the reasons why zombie companies continue to borrow loans from the perspective of the major shareholders of zombie enterprises.In this context,based on the perspective of corporate governance,and from the political and economic motives of major shareholders and executives,this paper discusses the root causes of zombie enterprises' continuously bank lending.On the one hand,on the basis of the political motivations of major shareholders and executives,this paper finds that zombie enterprises bear more government burdens.Further considering the maturity structure of the debt,it finds that long-term borrowing can significantly improve the capacity of zombie enterprises to bear policy burdens.The research shows that by taking on the policy burden and maintaining the enterprise's “stiffness and not death”,the zombie executives have not significantly reduced the probability of their political promotion due to the company's long-term mismanagement as a zombie enterprise.On the other hand,based on the economic motives of major shareholders and executives,this paper finds that although the explicit salary and invisible salary of directors and executives of zombie companies are significantly lower than those of non-zombie enterprises,however,the financing support provided by bank loans greatly improves the overall welfare level of directors and executives.At the same time,zombie enterprise bank loan guarantees that the enterprise does not go bankrupt,which is conducive to increasing the capital occupation level of major shareholders and executives to zombie enterprises,especially the cash flow provided by long-term loan.Because the financial risk is relatively small,it is more conducive to maintaing the economic interests of major shareholders.Based on the micro-view of zombie enterprises,this paper deeply analyzes the negative impact of zombie corporate bank borrowing on corporate value and its impact mechanism,and further explores the impact of zombie bank borrowing on the interests of major shareholders,in order to demonstrate the reasons why zombie enterprises continue to make bank loans from the perspectives of the company's main stakeholders.The research has deepened the understanding of the causes of zombie enterprises,and further enriched the understanding of various stakeholders in zombie enterprises,which expands the research perspective of corporate governance.This research has the strong application value in the respect of correctly handling the conflicts of various stakeholders in the zombie enterprise exit mechanism.