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Can Social Security Fund Holdings Increase Corporate Real Investment?—Empirical Evidence From Listed Companies in China

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Listed:
  • Long Tang
  • Jin Hu
  • Yanyan Zhao
  • Yuwei Chen
  • Yuanhua Zhou

Abstract

Using data from A‐share listed companies in China from 2010 to 2023, this paper examines the impact and mechanisms of Social Security Fund holdings on corporate real investment. The findings reveal that Social Security Fund holdings significantly increase corporate real investment, promoting the transition of enterprises from the financial sector to the real economy. Improved internal governance and enhanced external supervision of the held companies are the main mechanisms behind this effect. This effect varies significantly depending on the number of companies held by the Social Security Fund, the duration of holdings, agency costs, differences among auditing firms, and the nature of enterprise property rights. Other institutional investors' holdings do not promote an increase in corporate real investment. The Social Security Fund holdings have a stronger promoting effect on companies with insufficient real investment, and it can reduce investment in financial assets. This research holds significant implications for better leveraging the Social Security Fund to improve corporate governance, enhance external supervision, increase real investment, and promote the transition of enterprises from the financial sector to the real economy.

Suggested Citation

  • Long Tang & Jin Hu & Yanyan Zhao & Yuwei Chen & Yuanhua Zhou, 2026. "Can Social Security Fund Holdings Increase Corporate Real Investment?—Empirical Evidence From Listed Companies in China," Bulletin of Economic Research, Wiley Blackwell, vol. 78(3), pages 541-558, July.
    • Handle: RePEc:bla:buecrs:v:78:y:2026:i:3:p:541-558
    DOI: 10.1111/boer.70038
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