The Empirical Study Of The Impact Of Financial Asset Allocation On Firm Value

With China entering the transition period of economic structure,the real economy is facing the decline of operating profit.But the industry of finance and real estate keep a high rate of capital return with the policy advantage.Driven by the motivation of capital profit,a considerable part of the non-financial listed companies use a large amount of money to allocate financial assets.According to the database of CSMAR,the scale of financial assets held by nonfinancial listed companies in China increases from 254.7 billion yuan in 2007 to 1500.6 billion yuan in 2016,an average annual growth rate of 19.4%,while the average share of financial assets rises rapidly after 2012,increases from 5.7% in 2012 to 7.6% in 2016.However,the investment in operating assets is still sluggish.Thus,the imbalance of financial assets and operating assets has gradually become an important feature of the development of non-financial listed companies in China.In view of this phenomenon,we can draw a series of questions: what are the factors that promote the large scale of financial assets investment of Chinese Listed Companies in the current economic downturn? Does a large amount of funds be used to allocate financial assets to produce an extrude effect on operating assets investment? With the increasing scale of financial assets,the investment decision and management mode of enterprises will change accordingly.Will this change affect the efficiency of business operation? The enterprise value is the best indicator to reflect the effect of the enterprise's financial decision.What impact does a large scale of financial asset allocation have on the enterprise value? And what kind of transmission mechanism does it affect? This is an urgent and important practical problem.From a theoretical perspective,because of the dual nature of liquidity and investment of financial assets,the direction of the impact of financial asset allocation on corporate value is uncertain.The relationship between them is a problem that needs to be solved empirically.Based on the above research background,this paper using the data of A shares nonfinancial listed companies from 2007 to 2016,in accordance with the research ideas of “current situation analysis-influencing factors-transmission mechanism-economic consequences”,making an in-depth analysis of the status quo of corporate financial asset allocation,the factors affecting the allocation of financial assets,the relationship with business activities and the impact on enterprise value.The main conclusions of this paper are as follows:(1)the number of listed companies with financial assets is increasing year by year,the average share of financial assets falls sharply in spite of the impact of the financial crisis in 2008,but it is on the rise again after 2012,the average share of financial assets of non state-owned enterprise is significantly higher than the state-owned enterprise,the average share of financial assets of small scale listed companies is significantly than large companies,the average share of financial assets in low operating investment industry is relatively high,and the industry that require a large amount of fixed assets and R&D innovation is relatively low,in addition to the average share of financial assets formed by entrusting loans and financing of manufacturing listed companies is significantly higher than the non-manufacturing listed companies,the remaining indicators are significantly lower than those of non-manufacturing listed companies;(2)the relative risk of operating assets and the difference of the return rate between financial assets and operating assets have a significant positive correlation with the proportion of the enterprise's financial assets investment,further research shows that the mismatch of risk and return on financial assets caused by the mechanism problem is the main reason for the increase of the scale of financial assets investment;(3)the allocation of financial assets inhibits the investment of operating assets in the current and future periods,the inhibitory effect on the current operating assets is stronger than the inhibition in the future,while the inhibition effect on the current fixed assets and intangible assets is weaker than the inhibition in the future,from the comparison of the regression results of the three kinds of operating assets,it finds that the financial assets allocation has the strongest crowding-out effect on the intangible assets investment,followed by the fixed assets and the weakest on the operating assets,and the conclusions still set up in subsamples of different cash flow and profitability,in addition,the allocation of financial assets also has a significant negative impact on the total factor productivity of the enterprise in the current and future period,the conclusions still set up in different ownership enterprises,and the restraining effect on state-owned enterprises is stronger than that of non state-owned enterprises;(4)the financial assets allocation significantly reduces the enterprise value in the whole,for companies with different degree of financing constraints,there is no significant correlation between the allocation of financial assets and the enterprise value,for companies with stronger alternative motivation,the negative correlation between the financial asset allocation and the enterprise value is more significant,thus it shows that companies are more likely to allocate financial assets out of alternative motives,further studies show that both stateowned enterprise and non state-owned enterprise are based on alternative motives to allocate financial assets,but the negative impact on state-owned enterprises is stronger than that of non state-owned enterprises.From the theoretical point of view,the conclusion of this paper is helpful to further enrich and improve the relevant theories of financial assets allocation economic consequences;in the real sense,on the one hand,the conclusions of this paper can guide management to rationally allocate financial assets and better play the functions of precautionary savings and risk diversification of financial assets to serve the development and operation of business entities,on the other hand,it provides a theoretical basis for the government to formulate policies to curb financialization of entity enterprises,revitalize the real economy and promote sustainable and healthy economic development.