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| Tunneling Behaviors of Large Shareholders and the Phenomenon of “High Deposits and Loans” |
| JIA Fansheng1,2,WANG Handi1,2,XIA Changyuan3 |
1.School of Management, Ocean University of China
2.China Business Working Capital Management Research Center, Ocean University of China
3.Institute of Financial Studies, Southwestern University of Finance and Economics
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Abstract: This paper examines the internal logic and governance mechanism of the “high deposits and loans” mystery of Chinese enterprises from the perspective of type II agency problem, using Chinese A-share listed companies from 2007 to 2019 as a sample. We find that: (1)the higher the degree of separation between the two rights of major shareholders, the more prominent the problem of “high deposits and loans” in the company, for each unit increase in the separation, the probability of “high deposits and loans” increases by 6.33%, indicating that the motivation of major shareholders' tunneling may be a driving factor for the “high deposits and loans”; (2)the mechanism behind the effect shows that this effect mainly stems from major shareholders' financing pressure, and only works when the financing constraint of companies is low; (3)further, by measuring external governance by short-sell pressure and internal governance with internal control quality, effective external and internal governance can suppress the “high deposits and loans” of companies driven by large shareholders short-sell motives; (4)finally, “high deposits and loans” have serious negative effects on the financial performance and sustainable development of companies. Our findings contribute to explaining the reasons for the increased risk of the real economy in China, and provide empirical evidence for the mystery of “high deposits and loans”.
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Received: 25 June 2023
Published: 15 November 2023
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2023, Vol. 37 
浙公网安备 33011802000512号