Abstract
ABSTRACT Pension insurance contribution is an important factor affecting corporate financial decision-making. This study investigates the influence of the pension insurance contribution rate reduction policy on the corporate maturity mismatch between investment and financing. We found that the pension contribution reduction policy reduces actual contribution burden of firms, and the average actual contribution rate decreases by 0.26% after the nominal rate is reduced by 1%. However, the policy also significantly aggravates the corporate maturity mismatch of investment and financing, which survives a battery of robustness tests. The positive effect of pension insurance contribution rate reduction on the maturity mismatch of investment and financing is more apparent in private, smaller-scale firms and in firms with higher ownership concentration and lower management incentive levels. The pension contribution reduction policy strengthens long-term investment tendency by reducing the actual contribution burden of companies and shortens debt maturity by increasing principal-agent costs. The results of this study provide a new perspective for understanding the mismatch between corporate investment and financing.
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