Research On The Impact Of Financial Asset Allocation Of Manufacturing Enterprises On Their Main Business Performance

Financial asset allocation refers to an investment decision-making behavior that managers use investment funds to allocate financial assets according to the enterprise’s investment objectives and investment scale.According to the relevant data of CSMAR database,it is found that in 2020,the financial assets held by China’s A-share listed manufacturing enterprises have reached 2.35 trillion yuan,about 10.85 times that of 2007,indicating that the overall financial asset allocation scale of manufacturing enterprises has increased significantly.The existing literature shows that the level of financial asset allocation of non-financial enterprises is significantly related to the main business performance,but at present,scholars have no unified conclusion on whether the two are positive or negative.At present,it is at the key node of the transformation and upgrading of China’s manufacturing industry and the full opening of the financial industry.It is particularly urgent and important to study the impact of the financial asset allocation level of manufacturing enterprises on the development of their main business.Taking the annual panel data of A-share manufacturing listed enterprises in Shanghai and Shenzhen from 2007 to 2020 as the research sample,this paper studies the impact degree and impact mechanism of financial asset allocation on main business performance.Firstly,the relationship between financial asset allocation level and main business performance is tested by fixed effect model,and the robustness of the relationship is tested by using IV-GMM model,selecting variables lagging behind one period,replacing explained variables,replacing explanatory variables and reducing sample size.The results show that the level of financial asset allocation is negatively correlated with main business performance.Secondly,it verifies the intermediary effect of R&D investment.The empirical results show that the level of financial asset allocation is negatively correlated with R&D investment,R&D investment is positively correlated with main business performance,and financial asset allocation reduces main business performance by crowding out R&D investment.Thirdly,it explores the regulatory effect of CEO financial background and CEO equity incentive.It is empirically found that the CEO with financial background makes the negative correlation between financial asset allocation level and main business performance stronger,and the CEO with equity makes the negative correlation between them weaker.Finally,the heterogeneity of financial assets is analyzed based on the existing empirical results.It is found that the negative impact of trading financial assets held by enterprises on the main business performance is not significant,while the holding of long-term equity investment and investment real estate significantly reduces the main business performance by crowding out R&D investment,and CEO financial background enhances the allocation of long-term equity investment and investment real estate has an inhibitory effect on the main business performance,and CEO equity incentive weakens the inhibitory effect of the allocation of these two types of financial assets on the main business performance.