Financing Constraints、Internal Controls And Enterprise Financialization

In recent years,more and more non-financial enterprises in China have been attracted by the high rate of return on investment of the financial industry.Enterprises have invested a large amount of capital in financial products,which has restricted the development of the entity field and caused the financialization of non-financial enterprises.The different holding motives of enterprises will affect the operation and management behavior of enterprises accordingly,and then affect the level of financialization of enterprises in different financing environments.Financialization of non-financial enterprises can cause’crowding out effect’on entity investment.Financial assets purchased for the motivation of’precautionary saving’ can also help enterprises realize capital preservation and value-added,which can help enterprises overcome the operating difficulties caused by insufficient liquidity or reserve funds for the next stage of product research and development.Therefore,this study,based on the perspective of financing,studies the response of most enterprises to increase or decrease their holdings of financial assets when the financing constraints are deepened.Thus,the financial degree of enterprises will be deepened and alleviated accordingly,and analyze the purpose of holding,then draw the conclusion that the degree of financing constraint of listed companies affects the financialization of enterprises.On this basis,considering that internal control,as an important part of corporate governance,can improve the effectiveness and reliability of accounting information and reduce various agency risks and operational risks and so on.Thus directly and indirectly affecting the degree of corporate financing constraints and the degree of enterprise financialization.This study introduces the effectiveness of internal control as a regulating variable of the impact of financing constraints on the degree of enterprise financialization and analyzes whether more effective internal control can enhance or weaken the impact of financing constraints on the enterprise financialization.In view of this,based on asymmetric information theory,principal-agent theory,shareholder value maximization theory and other theories,this paper analyzes the mechanism of financing constraints,internal control and enterprise financialization.A-share listed companies in Shanghai and Shenzhen Stock Markets from 2008 to 2019 are selected as research samples.STATA15.1 is used to empirically examine the influence of financing constraints,internal control and enterprise financialization and group them according to different property rights,concurrent employment of two posts and growth level.This paper empirically examines the difference in the enhancement effect of internal control on the negative correlation between financing constraints and enterprise financialization among different groups.This study applies asymmetric information theory,principal-agent theory and shareholder value maximization theory.This study expands the application of relevant theories in the study of influencing factors of enterprise financialization.It has a guiding role for enterprises to comply with the call of ’getting rid of the virtual to the real’and for the government and other regulatory departments to guide the financial industry to continuously ’escort’ the development of real economy and implement relevant measures.The results show that the higher the degree of financing constraint is,the more inclined enterprises are to reduce the proportion of financial assets.Effective internal control can restrain the level of enterprise financialization.The more effective the internal control measures are,the greater the proportion of financial assets will be reduced due to the stronger degree of financing constraints.Moreover,this strengthening effect is more obvious in non-state-owned enterprises,enterprises with the dual position of chairman and CEO,and enterprises with low growth.According to the above results,this paper puts forward suggestions from both enterprises and government.Enterprises should constantly strengthen and improve the construction of weak links in the company’s internal control system,use advanced financial management concepts,adjust the asset structure,and make the value growth point fall on the improvement of core competitiveness.Facing the economic situation of ’financial hot and entity cold’.The government should further improve the reform of the financial industry,guide large financial institutions to play a leading role,improve their ability to serve the entity enterprises,and prevent the financialization of non-financial enterprises.