Research On The Impact Of Corporate Financialization On Entity Investment

In recent years,the trend of financialization has been increasing in the course of China's economic operation,which is manifested by the deepening of corporate financialization at the micro level.As the financial investment activities of entity enterprises gradually become active,a large amount of industrial capital deviates from the entity sector and flows to the virtual economy field.Enterprises have shifted their investment perspective from their original main business to financial markets and real estate markets with higher profit margins,which has accelerated the pace of financial asset allocation.Corporate financialization has become a new trend in the development of entity enterprises.At the same time,the level of entity investment is showing a downward trend.The growth rate of entity investment continues to slow down,and the gap between financialization investment and entity investment has increased.In order to examine the relationship between corporate financialization and entity investment,this paper uses 2008-2018 Chinese non-financial enterprises as a research sample.Based on preventive savings theory,financing constraint theory,and investment substitution theory,this paper analyzes the crowding effect and reservoir effect of corporate financialization on entity investment at a theoretical level,as well as the adjustment mechanism of monetary policy and financingconstraints.This paper measures the degree of corporate financialization from the perspective of financial asset allocation,and uses panel regression fixed-effects model to empirically test the relationship between corporate financialization and entity investment.The research results show that:(1)Overall,corporate financialization has a significant negative crowding effect on entity investment.In order to chase higher excess returns,companies invest funds in virtual economic sectors such as finance and real estate,which will have a negative impact on the development of entity investment.(2)From the perspective of different types of financial assets,trading financial assets with strong liquidity and strong liquidity have a certain reservoir effect on physical investment.while non-trading financial assets such as real estate investment and long-term equity investment have a greater crowding effect on entity investment.(3)The negative impact of corporate financialization on entity investment will intensify as monetary policy becomes looser,that is,loose monetary policy strengthens the crowding effect of corporate financialization on entity investment.(4)Financing constraints play a regulatory role in the impact of corporate financialization on entity investment.Financing constraints will strengthen the negative effect between corporate financialization and entity investment.As the financing constraints imposed on enterprises increase,the crowding effect of corporate financialization on entity investment will increase.(5)Theimpact of corporate financialization on entity investment is heterogeneous.Finally,this article puts forward relevant policy suggestions.The research in this paper not only helps to correctly analyze the financialization behavior of enterprises,but also helps enterprises prevent excessive financialization,and has an important reference value for guiding enterprises to return to entity economy,reasonably guiding funds to return to the entity,and revitalizing the development of the real economy.