Will State-owned Equity Participation Improve Over-debt Of Private Enterprises?

After the financial crisis in 2008,with the implementation of the "4 trillion"economic stimulus plan,the leverage level of Chinese enterprises continued to rise rapidly.Due to their profit-seeking characteristics,private enterprises took advantage of the advantages of loose credit,and there were cases of disorderly expansion of production and blind foreign investment,which caused a great waste of resources and laid a major hidden danger for the sustainable and stable development of private enterprises.At the same time,the state actively encourages and advocates state-owned capital to invest in private listed companies in various forms,bail out listed companies with operational difficulties and strategic investment with development prospects,and assist the reform and transformation of private listed companies.Whether state-owned capital injection can improve the unhealthy operating conditions of private enterprises and realize the sustainable development of private listed companies has gradually become a hot topic in society.Combined with the above problems,this paper selects China’s private listed companies from 2010 to 2019 as the research object,establishes a regression model to calculate the target debt ratio of private listed companies,and analyzes the debt governance effect after state-owned equity participation.The empirical test of excessive debt was conducted,and finally came to the conclusion:First,the problem of excessive debt of private listed companies is more common in China.From 2010 to 2019,about 55%of private listed companies had excessive debt finance.From the perspective of the average actual debt ratio,the actual debt ratio of China’s private listed companies exceeds the optimal debt ratio by 6.04%;Secondly,state-owned equity is conducive to improving the debt management capabilities of private listed companies and restraining private companies over-debt financing behavior.After state-owned equity shares,over-debt private listed companies actual debt ratio is reduced by about 2.46%from the optimal debt level.State-owned equity Participation of shares is of significant help to the problem of debt governance of private enterprises;Third,through regression analysis of private enterprises with different characteristics,we find that for companies with weak profitability and low growth potential of over-debt,state-owned equity participation debt governance effect is more significant.