A Study Of The Impact Of The Financialisation Of Non-Financial Corporates On Corporate Employment

In recent years,under the influence of overcapacity in traditional industries,the profit rate of investment in the real economy has declined significantly,while the financial industry has maintained an ultra-high rate of return by virtue of policy dividends.Driven by the goal of profit maximisation,enterprises are keen to invest in finance,showing a obvious trend of " transforming from substantial to fictitious".During this period,China’s economy and society exhibited a high level of urban survey unemployment rate.Theoretically,the financialisation of nonfinancial enterprises has a certain impact on employment.On the one hand,financial assets with high liquidity provide enterprises with a variety of financing channels,and financial assets with hedging functions(financial derivatives)can avoid risks in the production and operation of enterprises.and enterprises can continue to expand their production scale in the future,which has a positive impact on employment.On the other hand,enterprises,driven by the goal of profit maximisation,invest too much money in the financial sector,which will crowd out some physical capital investment and innovation and deviate from the main business,which has a negative impact on employment.Considering that enterprises are the key to absorbing employment,this paper discusses the impact of financialisation of non-financial enterprises on enterprise employment from a micro perspective,explores its internal transmission mechanism and puts forward some policy suggestions,which are of great theoretical and practical significance.Taking non-financial listed enterprises from 2008 to 2019 as samples,this paper takes the financialisation of enterprises as the explanatory variable,enterprise employment as the dependent variable,and selects labor cost,enterprise size,asset liability ratio,return on assets,operating cash flow,growth,and enterprise age as the control variables.This paper examines the impact of nonfinancial enterprises on enterprise employment,and its influencing mechanisms and heterogeneity analysis based on the perspectives of property rights nature,factor intensity,and executive financial background by constructing a two-way fixed effect model.The results show:(1)Financialisation of non-financial enterprises has a significant negative impact on enterprise employment.(2)The negative impact of the financialisation of non-financial enterprises on employment is all-rounded,with personnel from different departments and different cultural levels of the enterprise crowded out.(3)Financialisation squeezes out physical capital investment and enterprise innovation,which in turn reduces enterprise employment.(4)The negative impact of financialisation of non-financial enterprises on enterprise employment is more pronounced in non-state owned enterprises,capital intensive enterprises,and enterprises whose executives have financial work experience.Based on the results,some policy suggestions are made:(1)The government should improve the physical investment environment by increasing tax and fee cuts.(2)The government should rectify the companies in the financial sector and allow full competition in the market so that the industry profit rate will even out.(3)The government should strengthen financial regulation to curb asset price bubbles.(4)Companies should pay attention to organisational changes and integration within the company to optimise the corporate governance system.The innovations of this paper are as follows:(1)When examining the impact of non-financial enterprises’ financialization on the total employment of enterprises,the impact on the number of employees of enterprises’ production personnel,sales personnel,financial personnel,technical personnel and administrative personnel as well as the impact on the number of employees of enterprises with doctorate,master’s degree,undergraduate degree,junior college degree and high school education has been detailed.(2)This paper examines the mechanism of innovation(number of patent applications)when studying the mechanism of the impact of financialisation of non-financial enterprises on the enterprise employment.