The Allocation Of Financial Rights Within The Group And The Financialization Of Listed Companies

In recent years,due to industrial overcapacity,declining profits,long investment return cycle and other reasons,more and more real enterprises are engaged in financial investment that deviates from their main business,resulting in a trend of financialization,which brings serious "real to virtual" risks,which directly affects the realization of China's goals of "preventing and resolving major risks" and "six stabilities".In view of this,China's government departments have repeatedly stressed and reminded on many important occasions and meetings since 2014,requiring the alarm bell to ring for a long time to prevent the industry from taking the road of "disenchantment from reality to emptiness".The 19 th CPC National Congress took preventing and resolving major risks as the first of the three key battles,and pointed out that whether to focus on the real economy is the key to building a modern economic system.The 10 th meeting of the central financial and Economic Commission also reiterated the need to adhere to the bottom line thinking of avoiding systemic financial risks and do a good job in the prevention and resolution of major financial risks.Preventing and resolving financial risks is a major pass that must be crossed to realize the sustainable and high-quality development of enterprises.Exploring how to effectively manage the "real to virtual" risk brought by the financialization of entity enterprises has become an important part of the government's work,which focuses on providing focus by exploring the influencing factors of enterprise financial melting.In fact,the academic and practical circles have not stopped exploring the influencing factors of enterprise financialization.A large number of studies have investigated the impact of external macroeconomic development,fiscal policy,financial policy,enterprise financial characteristics,governance characteristics,business characteristics and human capital characteristics on enterprise financialization.However,it is a pity that the existing literature on the financialization of real enterprises almost takes the research object as an independent individual,and fails to consider the impact of the collectivization operation mode on the financialization of enterprises under the background of "large-scale and collectivization" of Chinese enterprises.Compared with individual enterprises,the adverse consequences of financialization of group enterprises on macro and micro levels will be more extensive and serious.As an investment behavior deviating from the main business,enterprise financialization is closely related to the allocation of financial resources within the group.Then,will the allocation of financial rights within the group between parent and subsidiary companies affect the financialization of listed companies? Further,what is the mechanism of financial power allocation within the group on the financialization of listed companies? Is there any difference in this impact under the heterogeneous characteristics of organization,governance and finance? Will the allocation of management power and personnel power within the group have an impact on the relationship between the allocation of financial power within the group and the financialization of listed companies? It is worth noting that the financialization level of listed companies in this paper is actually the financialization level of the group as a whole composed of parent and subsidiary companies,and the full text reflects the allocation of financial rights within the group and the financialization level of listed companies through the data of consolidated statements of parent and subsidiary companies and statements of parent companies disclosed by listed companies in China.In order to answer the above questions,this paper selects the listed companies(except the sample of financial and real estate)in Shanghai and Shenzhen from 2007 to2020 and their date of the consolidated statements and parent company statements,and empirically studies the impact mechanism of the overall internal financial power allocation of listed companies composed of parent and subsidiary companies on their financialization,as well as the differences between the two under different organizational,governance and financial characteristics.It also discusses the impact of the allocation of financial power,cooperative management power and personnel power on the financialization of listed companies.The main research content of this paper includes three aspects.First,the basic relationship between the allocation of financial rights within the group and the financialization of listed companies.Second,the extensive research on the relationship between the allocation of financial rights within the group and the financialization of listed companies,including the test of influence mechanism and situational analysis.Third,the influence of the coordination of financial power,management power and personnel power allocation within the group on the financialization of listed companies.This paper finds that:Firstly,the decentralized allocation of financial rights within the group will improve the financialization level of listed companies,which is mainly realized by improving the first type of agency problem and the second type of agency problem under the profit motive.Secondly,by examining the organizational,governance and financial characteristics of the group,it is found that the greater the control of the parent company,the establishment of financial companies within the group,the more dispersed the debt distribution within the group,and the higher shareholding ratio of institutional investors,the more beneficial it is to alleviate the boosting effect of the decentralized allocation of financial rights within the group on the financialization of listed companies,while the more subsidiaries and non-state-owned enterprises,On the contrary,it will aggravate the above boosting effect.Thirdly,the incentive effect of decentralized allocation of management power within the group and the governance effect of centralized allocation of personnel power can weaken the promotion effect of financial power allocation within the group on the financialization of listed companies.If the "financial power-management power-personnel power" within the group presents a "decentralized decentralized centralized" allocation between parent and subsidiary companies,the negative effect of the centralized allocation of personnel rights will weaken the "incentive effect" of the allocation of management rights,which is not conducive to alleviating the boosting effect of the decentralized allocation of financial rights within the group on the financialization of listed companies.This paper examines the impact and mechanism of the allocation of financial rights within the group on the financialization of listed companies.It conforms to the requirements of the national development strategy,has better practical significance and can have better policy enlightenment to practice.Therefore,based on the above research conclusions,this paper puts forward targeted policy suggestions from the subsidiary level,listed company level and government level.The innovation of this paper are as below:Firstly,the research on the subject of financialization has changed from focusing on the financialization of macro-economic level and the financialization of independent individuals to focusing on the financialization of the whole group composed of parent and subsidiary companies.This paper breaks through the limitations of the existing literature and focuses on the overall financialization of the group composed of parent and subsidiary companies,rather than the financialization level of macro-economy and independent individuals.Secondly,the research on the influencing factors of enterprise financialization has changed from focusing on the external macro environment and the characteristics of independent individuals to focusing on the allocation of financial rights within the group between parent and subsidiary companies.Different from the previous literature,this paper discusses the influencing factors of financialization from the perspectives of macroeconomic development,macroeconomic policies,macroeconomic regulatory environment,corporate business characteristics,financial characteristics,human characteristics and corporate governance characteristics,this paper studies the relationship and mechanism between the allocation of financial rights between parent and subsidiary companies and the overall financialization of listed companies.Thirdly,the research on the economic consequences of the allocation of financial rights within the group has changed from simply considering the impact of financial rights within the group to systematically considering the constraints of situational factors such as group organization,governance and financial characteristics.This paper examines the impact of organizational,governance and financial characteristics on the relationship between the allocation of financial rights within the group and the financialization level of listed companies,and systematically reveals the constraints of the allocation of financial rights within the group on the financialization of listed companies.Finally,the research on the division of power within the group has changed from simply paying attention to the centralization or decentralization of power within the group and only considering a certain power feature of financial power,management power and personnel power to paying attention to the coordinated allocation of financial power,management power and personnel power within the group at the same time.Breaking through the existing literature to generally investigate the economic consequences of the overall power of enterprises or a certain power characteristic,this paper subdivides the power into three dimensions: financial power,management power and personnel power.In addition to investigating the basic relationship between the allocation of financial power and the financialization of listed companies,it also brings the above allocation of power into the same analytical framework to test the synergy between the allocation of management power and personnel power.