Research On The Impact Of Listed Companies' Deleveraging On Their Operating Performanc

As the advantages of the growth model of debt driven investment in Chinese enterprises gradually weaken,the risk of high debt in enterprises gradually becomes apparent,and there is further the possibility of triggering financial risks.To prevent and defuse major financial risks,deleveraging has become one of the important elements of China’s macroeconomic policies since 2015.For most highly leveraged enterprises,it is extremely difficult to reduce liabilities or increase equity.When the goal of deleveraging is difficult to achieve,under the joint pressure of policy regulation and capital markets,some enterprises,in order to reduce the leverage ratio displayed on their balance sheets,use accounting methods such as off balance sheet liabilities,"fake equity real debt" to conduct "leverage manipulation" to hide liabilities or finance.It does not reduce corporate debt risk,but rather increases systemic risk in the capital market,contrary to the original intention of the deleveraging policy.This parper takes the panel data of non-financial enterprises listed on China’s Shanghai and Shenzhen A-share from 2008 to 2020 as the research sample,measures the "leverage manipulation" of enterprises based on the XLT-LEVM method.Conducts an empirical study on the impact of deleveraging on business performance of listed companies under the policy of deleveraging,included "hidden liabilities" into enterprise leverage ratio.This parper finds that:(1)The use of "leverage manipulation" by enterprises to hide liabilities or finance weakens the promotion effect of deleveraging on business performance of the enterprise.Taking "leverage manipulation" into account,a reduction in the true debt ratio of enterprises can significantly promote business performance of the enterprise.(2)Deleveraging can promote business performance of the enterprise through reducing agency costs and reducing inefficient investment.(3)The promotion effect of the deleveraging on the improvement of business performance is more significant among non-state owned enterprises,and the positive effect of deleveraging is not significantly reduced by non-state owned enterprises’ "leverage manipulation".(4)The promotion effect of the deleveraging on the improvement of business performancee is more significant in highly leveraged enterprises;Moreover,the "leveraged manipulation" by highly leveraged enterprises has not brought into play the governance effect of debt,it increasing the agency costs of enterprises.(5)For underinvested enterprises,"leverage manipulation" can alleviate their underinvestment and promote business performance of the enterprise.