A Study On The Governance Of Excessive Financialization Of Enterprises

Since the reform and opening up,China’s economy has been growing rapidly,but the expansion and growth rate of financial assets scale far exceeds the real economy,and the financial phenomenon of real enterprises is becoming more and more serious,which leads to the real economy from real to virtual,squeezing the real economy.In October 2022,the Report of the Party’s 20 th National Congress pointed out that high-quality development is the primary task of comprehensively building a modern socialist country.In December 2022,the Central Economic Conference stated that development must be of high quality and be able to drive an overall improvement in economic performance.To achieve high-quality economic development means focusing on developing the real economy and moving away from real growth to virtual growth.However,excessive financialization induces some entities to be disengaged from their main business,and the risk of high bubbles in the financial industry itself may lead to systemic risks.Excessive financialization is a major pain point for the high-quality development of national economy,so it is the general trend to control excessive financialization of enterprises.The questions that must be answered then include: What is over-financialisation? Why does over-financialization occur? What are the economic consequences of excessive financialization? How to deal with excessive financialization of enterprises?Based on the logical idea of "raising problems--analyzing problems--solving problems",this paper chooses Enterprise A as the case study object to explore the governance measures of excessive financialization.First of all,from the balance sheet,cash flow statement and profit statement,it is clear that enterprise A is over-financialized.Secondly,it analyzes the influencing factors of excessive financialization of enterprise A from the perspective of enterprise internal and macro environment.Thirdly,it discusses the economic consequences of excessive financialization from the financial performance and non-financial performance of enterprise A.Finally,it puts forward governance suggestions from three perspectives:internal enterprise,government policy and supervision,and financial institutions.Governance suggestions mainly include three aspects: First,the enterprise should be cautious when making financial decisions,consider the invested projects as comprehensively as possible,grasp the optimal degree of financialization,and diversify the performance appraisal of senior executives.Second,on the one hand,the government guides enterprises to return to their main business through monetary,industrial and fiscal policies;on the other hand,it strengthens and improves modern financial supervision.Third,financial institutions need to implement more precise credit assistance to balance the supply of credit resources.The practical significance of this paper is as follows: first,other enterprises are on the alert for the excessive financialization behavior,so they should conduct in-depth and comprehensive research before making investment decisions.Second,it provides practical reference for the government to guide enterprises to return to main business,effectively prevent the real economy from "turning from real to virtual",and promote the high-quality development of our real industry.Third,financial institutions effectively balance credit resources to provide practical reference.Theoretical significance lies in providing more direct evidence for the negative impact of excessive financialization on enterprises,verifying the research results of existing empirical literature,and enriching theoretical research at the micro individual level.