Confucian Culture And Enterprise Finance:Promotion Or Inhibition

The allocation of financial assets by enterprises may be motivated by preventive savings such as preventing cash flow breaks,hedging risks and expanding financing channels,or by speculative motives such as arbitrage of more profits.It is of great significance for enterprise operation to correctly understand the motivation and effect of enterprise financialization and give full play to the benign role of financial asset allocation.Behavioral economics points out that informal institutions such as culture will have an important impact on the behavior and decision-making of market subjects.As the mainstream of Chinese traditional culture,Confucian culture contains the most important connotation in Chinese philosophy,shapes the spirit of Chinese entrepreneurs,and is the most far-reaching informal system in China.Is Confucian culture promoting or inhibiting the enterprise financialization? Through which mechanism will Confucian culture influence the enterprise financialization? This thesis attempts to clarify the above issues,focusing on the economic effects of Confucian culture on corporate financial asset allocation and its impact mechanism.Based on the analysis of the existing literature,this thesis analyzes and studies the relationship between Confucian culture and corporate finance and puts forward the corresponding opposite research hypothesis based on the uncertainty avoidance theory,collectivism theory,principal-agent theory and manager overconfidence theory,that is,the "risk aversion" and "collectivism" contained in Confucian culture may strengthen the precautionary saving motivation of enterprises and promote corporate finance;At the same time,the "concept of justice and profit","integrity" and "moderation" in the Confucian culture may also inhibit the speculative motivation of enterprises and thus inhibit the financialization of enterprises.By selecting the annual data of China’s A-share listed companies from 2011 to2020 and using stata15.0 for empirical testing,the final research sample consists of 2762 enterprises,including 12805 observations.The empirical results show that:(1)Confucian culture has significantly improved the level of enterprise financialization by promoting the precautionary saving motivation of enterprises,which helps to alleviate the potential risk of enterprise cash flow fracture.The conclusion is still valid after using instrumental variable method to weaken endogenous problems and through the robustness test.(2)Further research shows that Confucian culture will have an impact on the financial asset allocation structure of enterprises.Under the influence of Confucian culture,enterprises tend to increase their holdings of short-term financial assets with strong liquidity and reduce their holdings of long-term financial assets with poor liquidity,playing the role of reserve funds.(3)In terms of financing constraints,enterprises with serious financing constraints are more sensitive to the impact of Confucian culture.(4)Heterogeneity analysis shows that the influence of Confucian culture on corporate financialization is more obvious in enterprises with higher business risk,enterprises with lower growth,enterprises with weak governance ability and industries with strong competitiveness.(5)The result of mechanism analysis shows that the risk aversion and collectivism in Confucian culture are the ways for Confucian culture to promote corporate finance.(6)The results of quantile regression show that the influence of Confucian culture on corporate financialization shows a trend of first strengthening and then weakening,that is,"asymmetric inverted U" structure.The conclusion of this thesis enriches the research on the influencing factors of enterprise financialization and extends the scope of influence of Confucian culture on modern enterprise management behavior.And put forward relevant suggestions based on the four perspectives of business operators,policy makers,market investors and cultural confidence.