Impact Of Corporate Financialization On Real Investment

China’s economic development has entered normalization,and the development mode has shifted from speed growth to high-quality development.Promoting the high-quality development of industry is bound to focus on the development of the real economy.However,under the current economic situation,the development of China’s real economy has shown problems such as overcapacity,high labor cost and insufficient investment in innovation,and has fallen into a weak stage.Moreover,under the trend of global financialization,the financial investment activities of real enterprises are becoming more and more active,and a considerable part of the industrial capital has deviated or even left the real sector and flowed excessively into the virtual economy.This is a new trend of financialization of enterprises.At the same time,the level of real investment of enterprises is also decreasing,and the growth rate of real investment is also slowing down,which will cause the gap between investment in the financial sector and real investment to become bigger and bigger,which is the appearance of financialization of enterprises.In recent years,the Chinese government is committed to promoting the growth of China’s manufacturing industry from"quantity" to the new development direction of foreign exports oriented by quality,technology and complexity,and promoting our country’s exports from "Made in China" to "Made in China and eventually become a trade power.The financialization of enterprises has a great negative impact on the realization of this goal,especially the development of the main business of real enterprises will be affected.In order to achieve high-quality development,the leading role of high-tech industries should be emphasized,and the enterprises in this industry need a lot of financial resources to invest,so we have to consider whether the financial market can support the enterprises in high-tech industries in their main business.In order to examine the impact between the financialization of enterprises in high-tech industries on real investment,this paper takes the listed enterprises under high-tech industries from 2007 to 2021 as the research sample and investigates the impact of the financialization degree of this part of enterprises on real investment.Based on theories of principal-agent,precautionary savings,speculative arbitrage,and financing constraints,this paper analyzes the "crowding-out effect" and "reservoir effect" of financialization of listed enterprises in high-tech industries on real investment in China,and explains the effects of arbitrage motive and financing constraints on real investment.The mechanism of arbitrage motive and financing constraint as well as economic policy uncertainty on this effect is explained.Since the study is mainly based on the financial statement data of listed enterprises in high-tech industries,and financial assets have different liquidity and maturity structures,financial assets are divided into two types of non-traded financial assets and traded financial assets.Due to the non-stationarity of the panel data and the Hausman test,this paper chooses to apply the unbalanced panel regression fixed-effects model to empirically test the relationship between corporate financialization and real investment.The results of the study show that:(1)Generally speaking,the trend of financialization of listed companies in high-tech industries has a significant "crowding-out effect" on real investment.In addition,companies will allocate more financial assets to reduce their investment in real capital due to the pursuit of high profitability.(2)When the level of financing constraint is low,enterprises will choose to hold liquid financial assets for capital reserve out of precautionary reserve motive,so as to be prepared for possible future risks,and the "crowding out effect" of enterprises’ allocation of financial assets on real investment is weakened from the perspective of reserve motive.In other words,the financialization behavior can,to a certain extent,weaken the negative impact on physical capital investment caused by the financialization of enterprises,but the financialization of enterprises still has a negative impact on physical investment.(3)The financialization of enterprises has the motive of market arbitrage.If enterprises in high-tech industries allocate financial assets with the motive of market arbitrage,the stronger the motive of market arbitrage,the more significant the negative correlation between financialization and physical investment for enterprises.That is to say,when a firm has a strong arbitrage motive,it holds financial assets in pursuit of higher financial returns,and therefore will invest more funds in financial markets,thus crowding out the space for investment in real entities.(4)The relationship between corporate financialization and its real investment will be affected by economic policy uncertainty.Specifically,as the degree of economic policy uncertainty increases,the "crowding out effect" on real investment caused by the increased financialization of enterprises will be weakened.Based on the empirical results,we propose rationalization suggestions from the perspectives of enterprises,financial institutions,and government,respectively.