Study On The Motivation And Economic Consequence Of Financialization For Real Enterprises

Chinese capital market has developed fast since the 21 st century.With the reform of interest rate and the emergence of financial derivatives,the financial industry has become a thriving scene,which become a representative of the profiteering industry.At the same time,Chinese real economy develops slow down because of the cyclical and structural problem.Under the internal pressure of rising costs,declining profits,excess capacity,and the external pressure shows that the return rate of real investment is less than the return rate of investment,real enterprises fall into the dilemma of living space.Therefore,lots of entity enterprises join in financial investment,trying to "make quick money".Real enterprises invest blindly in the financial market,who constantly put the resources originally used for productive investment into the financial field,which makes the economy appeared "out of the real to the virtual" situation and brings huge risk.Since the 19 th CPC National Congress,China has made a series of plans for deepening financial reform and providing financial services to the real economy.General Secretary Xi Jinping has also explicitly stated that "the financial sector serves the entity and strictly prevents systemic risks".Taking Youngor as the research object,the paper makes a longitudinal comparative study of its initial financialization,high financialization as well as de-financialization,and discusses the economic consequence of its different stages of financialization.First of all,the paper combs the domestic and foreign researches on the definition,the reason and the result of financialization,and then interprets relevant theories.Secondly,discusses the motivation of Youngor financialization from the external conditions such as the macro environment,the profitability of financial investment,as well as the internal factors,like diversification of business risks and the realization of the synergistic effect of capital operation.Thirdly,discusses the economic consequence from three part:financial indicators,the impact on the development of the main garment industry and the enterprise risk.It is found that in the initial stage of financialization,financialization does not play a significant role in Youngor.And in the highly financialized stage,Youngor short-term performance has been improved.But there is a serious lack of physical investment due to over-financialisation.On the one hand,the development of clothing industry is squeezed.On the other hand,enterprise face more serious risk.In the stage of de-financialization,Youngor returns to the main business and "fed" the income that gained from financial investment,and the income of the main business began to increase.Finally,comes to the conclusion: the entity enterprises should make reasonable strategies to avoid excessive financialization;the entity enterprises should not only return to industry and innovate,but also overcome the psychology of chasing short-term profits;the entity enterprises who participates in financial activities need to strengthen risk management.