Mixed ownership reform and the short-term debt for long-term investment of non-state-owned enterprises: Evidence from China

Lirong Chen, Feiyang Gao, Tongtong Guo and Xuanhao Huang

International Review of Financial Analysis, 2023, vol. 90, issue C

Abstract: In this study, we provide evidence on the effect of introducing state-owned shareholders in non-state-owned enterprises from the perspective of firms' short-term debt for long-term investment. Using Chinese Non-SOEs listed companies from 2010 to 2020 as the sample, we find that the introduction of state-owned shareholders in Non-SOEs significantly promotes the level of short-term debt for long-term investment. We also find the scale of short-term debt, the scale of long-term investment and the quality of internal control play a mediating effect in the relationship between the mixed-ownership reform and the short-term debt for long-term investment. Regional marketization level, economic downcycle, regional banks competition level, the economic policy uncertainty and the firms' market competition power can influence the effect of introducing state-owned shareholders in Non-SOEs. Further, our analysis of the economic consequences of the short-term debt for long-term investment implemented by Non-SOEs demonstrates that it indeed can reduce the cost of debt financing. Overall, the results shed light on the effectiveness of the mixed-ownership reform, and our findings enrich the literature of investment and financing strategy and provides empirical evidence to promote the mixed-ownership reform.

Keywords: Mixed-ownership reform; Short-term debt for long-term investment; China (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1057521923003770
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:90:y:2023:i:c:s1057521923003770

DOI: 10.1016/j.irfa.2023.102861

Access Statistics for this article

International Review of Financial Analysis is currently edited by B.M. Lucey

More articles in International Review of Financial Analysis from Elsevier
Bibliographic data for series maintained by Catherine Liu ().