This paper aims to investigate the alterations in financing cost for non-state-owned enterprises (non-SOEs) subsequent to the introduction of state-owned shares through the lens of ownership structure. It also investigates the role of government background customer relationship as a possible factor that can mediate the relationship between state-owned shares and non-SOEs’ financing cost.
A sample of the Chinese A-shares listed non-SOEs from 2009 to 2022 is used in the study. The study applies multivariate regression analyses to investigate the impact of state-owned shares on non-SOEs’ financing cost. Baron and Kenny’s (1986) three-step model is estimated to test the mediating effect exerted by the government background customer relationship.
The findings indicate that state-owned shares are significantly negatively related to non-SOEs’ financing cost through extending government background customer relationship. In addition, this study finds that green innovation in non-SOEs diminishes this effect. Heterogeneity analyses reveal that the function of state-owned shares is more pronounced when state-owned shareholders are investment-oriented and during periods of heightened economic policy uncertainty. Finally, the results suggest that lower financing costs are shown to enhance enterprise resilience.
The authors analyze the possible homogeneous linkage between state-owned capital and the government and explore the possible indirect impact of state-owned shares on the financing cost of non-SOEs from the perspective of government background customers’ procurement demand. The results confirm the theoretical and practical usefulness of state-owned shares and provide new empirical evidence to alleviate the expensive financing of non-SOEs.
