Summary:
In recent years, how to deal with zombie firms has become a widespread concern in top-level design, academic research and social practice in the context of the new era of economic structural transformation and the comprehensive deepening of reforms. In the process of China's economic transition, some companies have suffered long-term losses, near-zero profits and stagnant production. However, they have been able to survive by relying on large financial subsidies and low-cost bank credit and are commonly referred to as “zombie firms.” The existence of zombie firms not only affects the normal functioning of non-zombie firms and creates a crowding-out effect but also reduces the efficiency of resource allocation in the market, hinders technological progress and ultimately impedes high-quality economic and social development. Furthermore, as an important foundation of socialism with Chinese characteristics, state-owned enterprises (SOEs) play a key role in the rapid development of the Chinese economy and the realization of strategic goals. However, issues such as “owner's absence” and “inner control” have created a relatively serious zombification problem in some SOEs, restricting their core role in the national economy. Therefore, how to better manage state-owned zombie firms and promote the development of high-quality SOEs has become a key element in the success of the comprehensive deepening of reforms in the new era. On this basis, this paper studies the influence of non-state shareholders' governance on the de-zombification of SOEs in the context of the comprehensive deepening of mixed ownership reform in the new era. The results show that the participation of non-state shareholders in the high-level governance of SOEs can significantly reduce the number of redundant staff and increase capital intensity, thereby reducing the tendency of SOEs to become zombie firms. This effect is more pronounced when state-owned executives have relatively little influence over business decisions and when the equity structure dimension of governance is weak. By subdividing the indicators identifying zombie firms, this paper finds that the governance of non-state shareholders can reduce the degree of zombification of SOEs and promote their normal operation in terms of limiting the acquisition of low-interest loans and improving their profitability. Ultimately, the production capacity and market value of well-managed SOEs are significantly improved. The findings of this article show that the governance of non-state shareholders plays a positive role in promoting the de-zombification and development of SOEs, which not only provides a useful supplement to the literature on zombie firms' governance and SOE reform but also helps china better coordinate the core role of SOEs in the new journey of building a modern socialist country. In fact, SOEs play an irreplaceable role in promoting the development and growth of the socialist public economy, safeguarding national economic security and achieving national strategic goals, which are paramount in the new journey toward a modern socialist country. This article explores how to achieve the de-zombification of SOEs without losing control of state-owned shareholders and without losing state-owned assets, which is important for practice and policy. First, the findings of this article provide a workable solution for zombie firms. The governance of non-state shareholders can promote the development of SOEs to a position of honor in the context of mixed ownership reform. Second, in the mixed ownership reform process of SOEs, it is difficult to empower non-state shareholders to play a governance role by simply mixing equity. Only by better ensuring that non-state shareholders appoint directors, supervisors and senior executives to participate in the governance of SOEs can these shareholders have sufficient discursive power to mix public and private capital from “quantitative change” to “qualitative change.” Therefore, SOEs at all levels of mixed ownership reform should ensure that these shareholders exercise their due rights. Third, non-state shareholders face many constraints when playing an active role in governance. Top managers in SOEs often have undue personal influence over the enterprise, greatly weakening the voice of non-state shareholders. Therefore, to strengthen the voice of non-state shareholders, it is important to limit the influence of SOE managers, which will better ensure the effective progress of reform.
马新啸, 汤泰劼, 蔡贵龙. 非国有股东治理与国有企业去僵尸化——来自国有上市公司董事会“混合”的经验证据[J]. 金融研究, 2021, 489(3): 95-113.
MA Xinxiao, TANG Taijie, CAI Guilong. Governance of Non-state Shareholders and De-zombification of SOEs: Evidence from the “Mixed” Board of Directors of listed SOEs in China. Journal of Financial Research, 2021, 489(3): 95-113.
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