Financialization Of Real Business Entities,Inefficient Investment And Stock Price Crash Risk

The phenomenon of the financialization of real business entities have become more and more popular in China.On the one hand,the combination of industry and finance is an important model for the scale development of modern enterprises.On the other hand,excessive financialization will also lead to "imbalance between finance and real economy".Most of the existing studies focus on the inhibition of financialization on the real economy.For example,reducing investment in fixed assets,Reducing Innovation,Increasing financing costs,etc.However,the positive role of financialization has been neglected.And few articles have studied the impact of financialization from the perspective of financial stability.China's stock market is an immature market with retail investors as the main body.The repeated ups and downs not only seriously disturb the stability of the financial system,but also cause huge wealth losses.Through the effect of financialization of "reservoir" and existing research results,we can speculate that the financialization of real business entities can restrain the risk of stock price crash.In view of this,we comb the related literature on causes of stock price crash risk,the "reservoir" effect of financialization and inefficient investment.On this basis,we use the data of financialization of A-share listed companies without financial and real estate companies in China from 2010 to 2018 to examine the impact of real business entities financialization on the risk of stock price crash.Furthermore,it further studies the impact of real enterprise financialization on the risk of stock price crash under different property rights and the internal mechanism of the impact of real enterprise financialization on the risk of stock price crash.Research findings:(1)The financialization of real business entities significantly inhibits the risk of stock price crash.(2)The inhibitory effect of financialization of non-state-owned enterprises on the risk of stock price crash is better than that of state-owned enterprises.(3)The financialization of real business entities restrains the risk of stock price crash by reducing the inefficient investment of enterprises.This paper expands the research on the factor of restraining the risk of stock price crash,and enriches the relevant literature on the economic consequences of the financialization of real business entities.It has some enlightenment for correctly treating the financialization of real business entities.