Research On The Influence Of QFII Shareholding On Enterprise Financialization

The real economy is the foundation stone of national economic development,and it is also the foundation for enterprises to gain the initiative in the global economic competition.In recent years,due to the overcapacity in the real economy,the return on investment of traditional companies has decreased,and large amounts of capital have flowed to the high-yield financial industry.In addition,with the development of capital market,corporate financialization has become an important trend in the development of China’s non-financial enterprises in recent years.The growing importance of finance has led to an imbalance between the real economy and the virtual economy.General Secretary Xi Jinping pointed out the current situation of China’s financial market development after a close inspection of China’s economic development practice-a large amount of capital flowed into the virtual economy,which led to the formation of capital bubbles and gradually exposed financial risks.In view of the adverse impact on China’s economy caused by the phenomenon that China’s economy has turned from reality to emptiness in recent years,in order to avoid the over-development of the virtual economy and the over-extrusion of the real economy caused by self-circulation,the Fifth Plenary Session of the 19 th Central Committee has clearly pointed out that the focus should be on the development of the real economy and detailed arrangements should be made around the development of the real economy.Therefore,it is particularly important to find appropriate ways to curb the financialization of enterprises,prevent and resolve the risk of "turning the reality into the reality" of the economy,and clarify the reasons for the financialization of enterprises.In the process of financial opening up,China has issued the Qualified Foreign Institutional Investor(QFII)program,which aims to allow the largest foreign institution to enter into China’s fast-growing bond market and A-share market and introduce elements of western governance practices to Chinese enterprises.As the qualified foreign institutional investors who currently meet the criteria for inbound transactions are all large institutional investors,they usually focus on fundamental analysis and the investment philosophy of long-term investment.Therefore,QFII is likely to rely on the rationality and attraction of the target enterprise’s business model and corporate governance attributes to select excellent enterprises for investment.This concept also releases signals related to the potential value of these companies to the market,thus encouraging the enterprise information to become more transparent and the management to be more responsible,which helps to curb the short-sighted behavior of the enterprise,promote the value investment of the enterprise,thus reducing the investment willingness of the enterprise to the financial assets and inhibiting the level of enterprise financialization.Generally speaking,the research on the impact of QFII shareholding on corporate financialization is meaningful.This paper takes the data of listed A-share companies from 2010 to 2020 as samples,excluding the data of financial industry,ST and ST* companies,and empirically analyzes the relationship between QFII shareholding and corporate financialization.,and further verifies the mechanism of QFII shareholding on corporate financialization and the strength of the impact of different mechanisms.Content and conclusions of the study are as follows: First,based on various data in the financial statements,the impact of QFII shareholding on corporate financialization is investigated.The study found that QFII can play the role of corporate governance and reduce corporate financialization.Second,this paper examines the impact of QFII shareholding on corporate financialization under different ownership nature and different competition levels.The empirical results show that,QFII equity of state-owned enterprises has a greater impact on financial deregulation of enterprises than non-state-owned enterprises;Compared with the enterprises with greater competition in the industry,among the enterprises in the industry with less competition,QFII shareholding has a more significant inhibitory effect on enterprise financialization.III.The impact of QFII shareholding on corporate financialization can be achieved by improving corporate governance and information transparency.The research in this paper shows that the shareholding of QFII is an important factor to reduce the financialization of enterprises,and QFII plays a role in corporate governance.This paper studies the impact of QFII shareholding on the financialization of listed companies by empirical method,which has certain enlightenment to the improvement of our country’s QFII system,has important significance to promote the QFII system to play a more active role in our country.At the same time,it provides an effective channel to reduce the degree of corporate financialization,improve the quality of listed companies and stabilize the stock market.This paper’s innovations include:(1)Most of the current researches focus on the homogeneous level of institutional investors,that is,the relationship between institutional investors and the enterprise operations.,but the academic circles do not study too much on the relationship between institutional investors and the enterprise operations from the perspective of heterogeneity,especially the impact of institutional investors on corporate financialization.From the perspective of QFII,this paper examines the effect of its shareholding level on corporate financialization,which is relatively novel.(2)After examining the influence of QFII shareholding on corporate financialization,this paper also discusses the difference of the effect of QFII shareholding on corporate financialization in enterprises with different equity nature and different industry competitiveness,which is helpful to understand the relationship between QFII and corporate financialization.