Research On The Relationship Between Corporate Financialisation,Financing Constraints And Investment Efficiency

With the increasing perfection of China’s financial market,the increasing variety of financial products has provided more choices for listed companies to allocate financial assets.On the other hand,as the profit return rate of real enterprises is often lower than that of the financial sector,the profit-seeking nature of capital makes more and more real enterprises gradually turn to the financial sector for investment.When enterprises continue to increase the proportion of financial assets allocated,the level of financialisation of enterprises deepens and the virtual economy expands at an accelerated rate.The increasing financialisation of enterprises will crowd out the funds needed for real investment and affect the efficiency of their investment.The essence of finance is to provide support and services to the real economy.The report of the 20 th Party Congress and the Central Economic Work Conference have repeatedly stressed that "the focus of economic development should be on the real economy".Therefore,it is important to study the mechanism and effect of financialisation of enterprises on investment efficiency,in order to guide China’s economy to "move away from the virtual to the real" and achieve efficient economic development.This paper takes the financialisation of China’s A-share listed companies as the starting point,and sorts out the two relationships between corporate financialisation,financing constraints and investment efficiency respectively.Based on the theories of precautionary savings,investment substitution,financing constraints and principal-agent,the relationship between the level of corporate financialisation and investment efficiency,as well as the mechanism of the role of financing constraints as a mediating variable,is studied by selecting non-financial listed A-share companies in China from 2011 to 2021 as a sample.The research results show that:(1)The relationship between corporate financialisation and investment efficiency has a significant inverted U-shaped characteristic.A moderate increase in financialisation can optimise investment allocation and improve investment efficiency,while a high level of financialisation will lead to a decline in investment efficiency.(2)Financing constraint is a mediating variable in the relationship between financialisation and investment efficiency,and plays a part in the relationship between financialisation and investment efficiency.(3)There are differences in the impact of firms’ allocation of financial assets with different liquidity on investment efficiency.Compared with long-term financial assets,the impact of allocating short-term financial assets on the investment efficiency of enterprises is more significant.(4)The impact of corporate financialisation on the efficiency of real investment is more significant in non-manufacturing listed companies.Based on the above findings and taking into account the actual situation of listed companies in China,recommendations are made at the enterprise and government levels respectively.Enterprises should invest prudently,improve their capital management and enhance their investment efficiency through reasonable allocation of financial assets;the government needs to strengthen the supervision of enterprises to prevent them from speculative arbitrage,and also establish a scientific investment approval process to create a good investment environment for the real economy.It is hoped that this paper will provide some theoretical support for China’s listed companies in the future in terms of financialisation development as well as entity investment decisions.