Business Credit And Corporate Financialisation

In recent years,China’s economic operation has experienced an obvious problem of “Tranform the economy from substantial to fictitious”,one of which is the rapid expansion of the scale of Financial assets held by non-Financial enterprises.To this end,the Party Central Committee has also repeatedly issued documents stressing that the real economy is an important pillar of China’s economic lifeline,and we should unswervingly follow the development path of “emphasizing the real economy”.Therefore,how to guide enterprises to " Remove deficiency and return to reality " and promote the stability of the Financial market has become the focus of academic circles.Domestic scholars have carried out a lot of research on the issues related to the "transition from reality to emptiness" of the economy,but from a micro perspective,there are still few studies on the governance mechanism of "transition from reality to emptiness".As an important Financing channel,commercial credit can effectively alleviate the Financing constraints of enterprises and improve the efficiency of capital allocation of enterprises.In addition,commercial credit is essentially a shortterm debt,which plays a very important governance function in reducing the agency cost of enterprises and restricting excessive investment.The abnormal phenomenon that non-Financial enterprises deviate from the main business investment route and instead allocate a large number of Financial assets also hides a certain tendency of speculation or over-investment.So,what is the impact of commercial credit on corporate Finance?The research found that:(1)under the condition of other conditions unchanged,commercial credit significantly inhibited the Financial behavior of enterprises as a whole;(2)Commercial credit mainly plays the role of creditor’s rights governance.Compared with short-term Financialization,commercial credit has a stronger negative impact on long-term Financialization;(3)On the one hand,commercial credit can reduce the Financial level of enterprises by easing the Financing constraints and then inhibiting the preventive saving motivation of enterprises;On the other hand,commercial credit exerts the effect of creditor’s rights governance,alleviates the principal-agent problem,reduces the agency cost,inhibits the profit-seeking motivation of the enterprise management,and ultimately reduces the level of enterprise’s Financialization;(4)Further research shows that because state-owned enterprises are affected by "non-economic objectives" and the low marketization assessment mechanism of managers,their motivation to allocate Financial assets is weak,so commercial credit has a stronger negative impact on enterprise Financialization in state-owned enterprises;In addition,in the face of fierce competition in the product market,due to the performance pressure,the management may have greater speculative arbitrage motivation to allocate Financial assets,which will weaken the effect of commercial credit to inhibit enterprise Financialization.This paper explores the impact of commercial credit on enterprise Financialization and its mechanism,which not only enriches the relevant research on the consequences of commercial credit and the factors affecting the real economy,but also helps enterprises to improve the relevant rules and regulations of commercial credit,and government departments can formulate targeted policies and measures related to commercial credit to curb the trend of enterprises’ “off the real to the virtual”,and guide Finance to return to serving the real economy,It is of profound significance to prevent and defuse Financial risks and promote sustainable and healthy economic development.