The Impact Of Enterprise Financialization On Financial Flexibility From The Perspective Of Life Cycle

As a reserve capacity to resist shocks,financial flexibility plays an important role in the development of enterprises.The ability of enterprises with high financial flexibility to cope with crises is significantly better than those with low flexibility.However,at present,the research on financial flexibility is not comprehensive and in-depth,and there are some problems such as the concept has not been unified,the measurement method is too simple,and how to improve it is not clear enough.Under the general trend of the financialization of entity enterprises,it is worth studying how the financialization affects the financial flexibility.From the perspective of enterprise life cycle,based on enterprise financialization,this paper studies its impact on financial flexibility,which has important theoretical significance and practical value.The paper statistically analyzes the current situation of enterprise financialization and financial flexibility,qualitatively analyzes the impact of financialization on financial flexibility from a theoretical perspective,and then conducts empirical testing.Based on the data of non-financial 1177 enterprises listed in Chinese A-share listed enterprises for 6 years from 2016 to 2021,taking the sample of the balanced panel data,this paper covers 16 industries,with a wider range of data.Constructs the enterprise financial flexibility index by using Analytic Hierarchy Process(AHP)and Coefficient of Variation method(CV).The index system includes three first-level indicators and five second-level indicators,which is more comprehensive than the traditional single or double indicators.The financial flexibility value is between 0 and 1,which is convenient for horizontal and vertical comparison.Expresses financialization of the enterprise by using the proportion of the financial assets held by the enterprise to the total assets.The life cycle of the enterprise is judged by the symbol of the net cash flow of the enterprise,which is divided into five stages.Considering the inertia of financial flexibility of enterprises,the first-phase lag term is added to the model.By constructing a dynamic panel model with SYS-GMM two-step method,this paper empirically tests the overall impact of enterprise financialization on financial flexibility and the impact at different stages of the life cycle.Furthermore,the bootstrap method and dynamic panel threshold model is used to explore the threshold effect of debt financing and equity financing.The results show that the deepening of financialization significantly enhances the financial flexibility of enterprises,which means the reservoir effect is obvious.By holding financial assets,the liquidity of assets is enhanced.When the enterprise needs funds,it can quickly turn into monetary funds,so that the enterprise can raise funds in a short time,prevent the shortage of funds such as insufficient cash flow,give full play to the role of "reservoir",and greatly improve the financial flexibility of the enterprise.When the return on investment of financial assets of an enterprise is higher than that of industrial investment,the enterprise will increase the investment in financial assets and obtain higher investment returns,thus making the "reservoir" larger,the total income increased and the financial flexibility enhanced.At each stage of the life cycle,enterprise financialization has significantly enhanced financial flexibility,but there are significant differences in the value.The impact in the shake-out stage is the smallest,followed by the growth stage and the introduction stage,the mature stage is larger,and the impact in the decline stage is the largest,which is about twice than the mature stage.Further study found that there are threshold effects of debt financing and equity financing.Debt financing is a double threshold,showing an inverted U-shaped relationship.With the increase of debt financing,the promotive effect gradually becomes the weakening effect.Equity financing is a single threshold.Crossing the threshold,the promotive effect of financialization on financial flexibility is enhanced.This research enriches the literature on enterprise financialization and financial flexibility,explores the impact of enterprise financialization on financial flexibility at different stages of the life cycle,elaborates on how to measure and improve financial flexibility,which have important theoretical significance and practical value.Hoping it could help enhance the ability of financial services to serve the entity economy,enhance the awareness of financial flexibility of enterprises,improve the level of response to market uncertainty,and promote the healthy development of entity economy.