Implicit Rent-Seeking Behavior Of Enterprises And The Cost Of Credit Financing

Under the background of strict anti-corruption,some rent-seeking and corruption activities still occur from time to time,which raised a question of why companies are willing to take risks in rent-seeking activities? To understand this reason,it is necessary to learn the intrinsic motivation of enterprise rent-seeking from a micro level.In recent years,the literature on rent-seeking has mainly focused on the impact of rent-seeking on corporate performance,innovation activities.These literature focuses more on the harm of rent-seeking on enterprises,while few literature has conducted empirical research from the perspective of the intrinsic motivation of rent-seeking,including the motivation of rent-seeking for credit resources.In fact,most enterprises in China still use bank credit as the main means of financing.However,due to the scarcity and monopoly of credit resources,coupled with bank credit discrimination,many enterprises face the problem of "difficult and expensive financing".In order to obtain credit funds and reduce borrowing costs,enterprises are prone to breeding the idea of rent seeking.In view of this,based on the credit market,this paper studies the effect of rent-seeking behavior on the cost of credit financing,and discusses the motivation of rent-seeking behavior of enterprises in the credit market.In addition,in recent years,China has begun to reform its business environment,aiming to provide enterprises with a more fair,market-oriented,and legalized external environment based on their needs.Therefore,optimizing the business environment means improving the formal system,which is conducive to reducing the number of enterprises seeking credit financing facilities through informal alternative mechanisms such as rent seeking.Therefore,this paper also combines the macro institutional environment with the micro corporate behavior to study the influence of business environment on the relationship between corporate rent-seeking and credit financing cost.Considering that the main reason for rent-seeking is the imperfection of legal system environment and government environment,this paper also carries out an empirical test on the regulatory effects of the two sub-indexes of business environment.Due to the fact that rent-seeking activities are illegal activities,enterprises generally adopt relatively obscure rent-seeking methods to establish relationships with commercial banks.Among these implicit rent-seeking activities,business entertainment activities are the most common.Some nominal business entertainment activities are often used to "whitewash" the rent-seeking behavior of enterprises.In view of this,this article selects A-share listed companies of Shanghai and Shenzhen from year of 2010 to year of 2020 as research sample,and measures the extent of implicit rent-seeking by using business entertainment fees to conduct empirical study.The results show that:(1)The impact of implicit rent-seeking on credit financing costs is negative,indicating that in the credit market,corporate rent-seeking behavior plays a "lubricant" role on credit financing costs;(2)Based on the nature of property rights,this paper conducts a group regression of enterprises,and the results show that only rent seeking activities by non state-owned enterprises can effectively reduce the cost of credit financing,which is not significant for state-owned enterprises;(3)Optimizing the business environment can weaken the effect of implicit rent-seeking on credit financing costs,Specifically,business environment optimization can improve the legal system environment and government environment,so as to reduce the effect of enterprises’ implicit rent-seeking on credit financing costs;(4)In a further analysis,this paper tests the governance effect of China’s anti-corruption policies,and the results show that anti-corruption policies can effectively weaken the impact of implicit rent-seeking on credit financing costs,which provides theoretical support for anti-corruption policies.The results of this study indicate that the phenomenon of rent-seeking in the credit market may be related to corporate financing difficulties,solving the problem of difficult and expensive borrowing is the motivation for companies to seek rent.Therefore,solving corporate financing difficulties will effectively help reduce the phenomenon of corporate credit rent-seeking.In addition,continuing to promote anti-corruption activities,optimizing the business environment can also effectively weaken the effect of enterprise rent-seeking.This study is conducive to deepening the understanding of motivations of corporate rent-seeking,and can also provide empirical evidence and suggestions on how to suppress corporate rent-seeking intentions.