The Impact Of Financial Asset Allocation On Main Business Performance

As China’s economy shows a downward trend,the physical sector is facing difficulties such as insufficient market demand,sharp rise in production costs,and financing difficulties,and the operating profits of physical enterprises have fallen.At the same time,the virtual economy is developing rapidly,and the profit margin of the financial industry is gradually widening the gap with the real field.Driven by high profits,entity companies allocate a large number of financial assets,which makes the financial industry gradually occupy the core position of economic development and hinder the sustainable growth of my country’s economy.In this context,this paper takes the data of A-share non-financial listed companies from 2007-2019 as the research sample to explore the impact of financial asset allocation on the main business performance of enterprises.First of all,this article combs the definition and measurement indicators of financial asset allocation level by domestic and foreign scholars from the micro level,and summarizes the literature on the main influencing factors of corporate performance and the impact of financial asset allocation on the performance of the main business.The entry point of this article research lays the theoretical foundation for the following analysis.Secondly,from the perspective of the term structure of financial assets,this article demonstrates the impact of the total financial assets and the allocation period on the performance of the main business.On this basis,further financing constraints and industry heterogeneity tests are carried out.Subsequently,the two adjustment variables of management compensation incentives and equity incentives were added to demonstrate the moderating effect of management incentives between the allocation of financial assets and the performance of the main business.The results show that:(1)The holding of financial assets by companies will have a negative impact on the performance of the main business,that is,the crowding-out effect.(2)After distinguishing financial assets according to the term structure of financial assets,it is found that both short-term and long-term financial assets will damage the main business performance of enterprises.(3)The negative impact of financial asset allocation on the performance of the main business shows greater heterogeneity: the holding of short-term financial assets and long-term financial assets by enterprises with high financing constraints will have a more significant crowding out effect on the performance of the main business;In the research on industry heterogeneity,long-term financial assets show a more obvious crowding-out effect on manufacturing enterprises,while the allocation of short-term financial assets does not have heterogeneity in industry attributes.(4)Different management incentives have different adjustment effects on the relationship between financial asset allocation and main business performance.Among them,salary incentive enhances the negative effect of financial asset allocation on main business performance,while equity incentive weakens the negative effect of financial asset allocation.The conclusions of this paper can provide reference for enterprises to allocate the proportion of financial assets reasonably and set up internal incentive mechanism,it also provides a theoretical basis for the government to formulate policies to supervise the financialization of enterprises and to broaden the direct financing channels of real enterprises.