Non-State-Owned Shareholders’ Governance and Financialization of State-Owned Enterprises

With the decline of profits in the real economy, non-financial enterprises continue to obtain excess returns by allocating financial assets, crowding out the real economy. As an important part of public economy, there exist many state-owned enterprises allocating financial assets. Although some existed studies examined non-state-owned shareholders’ impact on the financialization of state-owned enterprises, no consensus has been reached. This paper takes A-share listed SOEs from 2007 to 2022 as the research object and uses OLS regression. We investigate the influence of non-state-owned major shareholders on the financialization of state-owned enterprises deeply. The results show that non-state-owned shareholders will significantly inhibit the financialization of SOEs. After the robustness test, the conclusion is still valid. In the further analysis, we find that non-state-owned shareholders mainly inhibit the long-term financial assets that play the “crowding effect”. Non-state-owned major shareholders have a significant inhibitory effect in the regions with a higher degree of marketization. We innovatively discuss the influence of non-state-owned major shareholders on the over-financialization of SOEs, and then we find that major non-state-owned shareholders and shareholders appointing directors can exert an inhibitory effect.