An Examination Of The Impact Of Institutional Site Visits On Corporate Ponzi Financing Behavior And Mechanisms

With the rapid development of China’s economy in recent decades,the degree of openness in the financial market has also been increasing.The emergence of various financing channels and innovative financial tools has not only provided lifelines for enterprises,but has also increased financial risks.Preventing and resolving various financial risks and maintaining financial stability is of great practical significance to China,and ponzi financing by enterprises is an important factor affecting financial instability.The famous economist Minsky divided corporate financing types from the micro-enterprise perspective,and analyzed in depth the inherent relationship between corporate financing models,financial fragility,and economic instability.He proposed the famous “financial instability hypothesis.” When the number and proportion of ponzi financing companies in the market continue to increase,the financing fragility of individual enterprises will combine to form financial market fragility.Once certain ponzi financing companies experience a debt crisis,this crisis will quickly spread to the entire industry and jeopardize financial institutions,which may trigger market fluctuations and instability,ultimately leading to industry decline or even economic crisis.This article takes the relationship between institutional site visits and ponzi financing by enterprises as a starting point.Based on the micro-financial institutional perspective,it analyzes and examines the impact of institutional site visits on ponzi financing behavior of enterprises from two approaches: capital market information efficiency and external supervision,from 2013 to 2021.The research found that:(1)Institutional site visits significantly reduces the probability of ponzi financing behavior by enterprises.(2)The study proves two intermediary effects of overinvestment and investor attention.Specifically,institutional site visits reduces the probability of ponzi financing behavior by enterprises by inhibiting excessive investment levels of enterprises;Institutional site visits reduces the probability of ponzi financing behavior by enterprises by increasing investor attention.(3)The alleviating effect of institutional site visits on ponzi financing behavior is more significant in samples with larger research summary text,larger enterprise size,and lower educational backgrounds of senior executives.The main contribution of this article is to enrich the literature on the factors influencing ponzi financing from a microeconomic perspective.Previous studies have mostly focused on interpreting and comparing Minsky’s "financial instability" hypothesis from a macroeconomic perspective,and empirical research has mostly studied national units or constructed financial fragility indices at the sectoral level.Based on the micro-financial institutional perspective,this article provides empirical evidence of the positive externalities generated by institutional site visits,which is a beneficial supplement to the impact of institutional research on the capital market.It also enriches the literature on the factors influencing ponzi financing by enterprises and provides new theoretical and practical reference for national regulatory agencies to deal with ponzi financing and for banking regulatory departments to strengthen financial supervision.