The Impact Of The Financialization Of Entity Enterprises On Corporate Innovation

After the subprime mortgage crisis in 2008,China carried out macroeconomic regulation and control,so that the economy recovered and entered the overheating stage,and the economic growth rate slowed down;Entity enterprises are facing problems such as soaring costs,low return on industrial investment,and shortage of innovation funds.The high return on investment in the financial industry and real estate has induced the investment of entity enterprises,causing entity enterprises to ignore technological innovation and deviate from the main business operation,and the trend of financialization of non-financial enterprises is becoming increasingly obvious.In this environment,China has taken a series of measures to strengthen innovation and find new growth points for China’s economy.Government subsidies will have a certain impact on the relationship between corporate financialization and enterprise innovation,and government subsidies of different intensities will lead to changes in the consequences of financialization of enterprises,and ultimately affect enterprise innovation;Therefore,when exploring the relationship between corporate financialization and enterprise innovation,while studying the regulatory effect and direction of government subsidies,and proposing corresponding countermeasures,this has a positive impact on building a stable and orderly financial system,clarifying the way and extent of government subsidies,and cultivating new momentum for enterprise innovation and development.This paper takes the 2011-2020 China A-share entity listed companies as a sample,and combines theoretical analysis and empirical analysis to study the above problems.Through theoretical analysis,the relevant concepts of financialization,enterprise innovation and government subsidies of entity enterprises and the relationship between related concepts are summarized,which lays a foundation for the mechanism research in the following article.Through empirical analysis,the influence mechanism of government subsidies on promoting or inhibiting enterprise innovation by influencing the consequences of enterprise financialization is explored,the moderating effect of government subsidies on enterprise financialization and enterprise innovation is verified,and finally the regression results are tested by changing the data processing method,excluding related industries and replacing the explanatory variables.The study draws the following conclusions:(1)The impact of the financialization of entity enterprises on enterprise innovation is non-linear,and with the increase of the intensity of government subsidies,the "crowding out" effect of financialization of entity enterprises on enterprise innovation will continue to weaken.There is a certain critical point in government subsidies,below the critical point,corporate financialization is mainly manifested as a "crowding out" effect,at this time the financialization of entity enterprises will inhibit enterprise innovation,and when government subsidies are above the critical point,the consequences of corporate financialization are manifested as a "reservoir" effect,at which time financialization promotes enterprise innovation.(2)There are differences in the regulatory effect of government subsidies for enterprises of different sizes.The threshold value of government subsidies for large-scale enterprises is significantly higher than that of small-scale enterprises,indicating that for small-scale enterprises,relatively few government subsidies can produce greater enterprise innovation effects.(3)With the increase of government subsidy intensity,the consequences of the financialization of the manufacturing industry will gradually change from the"crowding out" effect to the "reservoir" effect,and the negative impact of financialization on corporate innovation will gradually disappear and become a positive promotion effect.However,for non-manufacturing industries,financialization has always realized the "crowding out" effect on corporate innovation,and the adjustment effect of government subsidies does not exist.(4)Due to the more fierce competition in the non-high-tech industry,the high degree of product homogenization,and the low profit margin of the main business,the lower level of government subsidies cannot promote the innovation of non-high-tech enterprises.Based on the above conclusions,this paper proposes the following suggestions:improve the return on operating investment and compress the market arbitrage space;Strengthen the supervision of the financial system and enhance the service level of the financial sector;Actively expand domestic demand and strengthen the protection of intellectual property rights;Find more reasonable subsidy methods and improve the pertinence of government subsidy policies;Complete screening mechanisms for government subsidies.The research conclusions of this paper are conducive to alleviating the trend of financialization of the real economy,developing a financial system that is compatible with the real economy,promoting the construction of an innovative power,and achieving high-quality economic development.In addition,the conclusions of the paper also have a certain enlightening effect on China’s economy and fiscal policy.