Can "The CPC’s Party Building Into Articles Of Association" Suppress The Financialization Of Non-Public Enterprises?

At present,China’s real economy presents a trend of financialization.Under the macro environment of the state emphasizing the prevention and resolution of financial risks,how to restrain the real economy from "removing from the real to the virtual" has become a practical problem.Corporate governance is an important internal factor that affects enterprise financialization.After August 2015,state-owned enterprises have written party building work into their articles of association.In addition,some private and foreign-funded enterprises have taken similar actions on their own initiative."The CPC’s Party Building into Articles of Association" is a new measure to strengthen the leadership of the Party at the enterprise level,which helps to clarify the legal status of the Party organization in the corporate governance structure,and thus promote the healthy development of non-public enterprises.This paper mainly studies the influence of "The CPC’s Party Building into Articles of Association" on the financialization of non-public enterprises and its mechanism.This study distinguishes between two motivations for corporate financialization.On the one hand,it may help alleviate the two types of agency problems through the mechanism of the party organization’s participation in corporate governance,and thus inhibit the enterprise financialization with the motivation of "investment substitution".On the other hand,it may help alleviate the financing constraints of non-public enterprises through the mechanism of party building credit enhancement and resource acquisition,thereby reducing the enterprise financialization of the "reservoir" motivation.For this reason,based on the data of all non-public(private and foreignfunded)listed companies in the A-share companies from 2012 to 2021 and the implementation time data of "Party Building" manually collected on the www.cninfo.com.cn website,this paper conducts an empirical study through the multi-period double difference method.This paper discusses the influence and mechanism of "Party Building into Articles of Association" on the financialization of non-public enterprises.The conclusions of this paper are as follows:(1)The implementation of "The CPC’s Party Building into Articles of Association" has a significant inhibitory effect on the financialization of non-public enterprises,and it did not have a significant impact on the financialization of enterprises in the current period,but from the next period.(2)The mechanism test shows that "Party Building into Articles of Association" is conducive to giving play to the mechanism of the party organization’s participating in governance,and further inhibits the enterprise financialization with the motivation of "investment substitution".However,it did not ease the financing constraints of enterprises through the mechanism of party building credit enhancement and resource acquisition,thereby reducing the enterprise financialization of the "reservoir" motivation.(3)Heterogeneity analysis shows that the inhibitory effect of "Party Building into Articles of Association" on the financialization of non-public enterprises mainly exists in enterprises whose executives have a financial background,private enterprises and enterprises in the non eastern regions.(4)Further analysis shows that " Party Building " mainly inhibits the holding of non monetary financial assets,but has a significant role in promoting monetary capital,a special financial asset.The research of this paper provides certain policy inspirations for the governance of the non-public enterprises’ "The CPC’s Party Building into Articles of Association" and the enterprise’s "departing from the real to the virtual".