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Corporate financialization and investment efficiency: Evidence from China

journal contribution
posted on 2023-08-15, 12:48 authored by Cynthia GongCynthia Gong, Pu Gong, Mengting Jiang

This study analyzes the financialization impact on investment efficiency and the mechanism using data from listed nonfinancial companies in China from 2011 to 2020. Results reveal that financialization has a positive effect on investment efficiency. Cross-sectional tests show that corporate financialization can significantly improve the investment efficiency of local state-owned enterprises (SOEs) and non-SOEs, and enterprises in eastern and central China. According to mechanistic analysis, the study also finds that corporate financialization improves investment efficiency by alleviating financing constraints. By suggesting the government unblock financing channels and increase capital liquidity, our findings can guide the financial sector to better serve the real economy.

Funding

National Natural Science Foundation of China [grant no. 71991473]

Major Project of the National Social Science Foundation of China [grant no. 21ZDA010]

History

School

  • Loughborough Business School

Department

  • Business

Published in

Pacific-Basin Finance Journal

Volume

79

Publisher

Elsevier

Version

  • AM (Accepted Manuscript)

Rights holder

© Elsevier

Publisher statement

This paper was accepted for publication in the journal Pacific-Basin Finance Journal and the definitive published version is available at https://doi.org/10.1016/j.pacfin.2023.102045. © 2023. This manuscript version is made available under the CC-BY-NC-ND 4.0 license https://creativecommons.org/licenses/by-nc-nd/4.0/

Acceptance date

2023-05-01

Publication date

2023-05-04

Copyright date

2023

ISSN

0927-538X

eISSN

1879-0585

Language

  • en

Depositor

Dr Cynthia Gong. Deposit date: 6 August 2023

Article number

102045

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