Factors Affects Financial Asset Allocation

Listed companies,by selling or issuing a portion of stocks via IPO,SEO,etc.,obtain funds from the market,and then invest in the real economy.However,in recent years,a large number of Chinese listed nonfinancial companies have actively deployed financial assets and are keen to invest in capital markets or non-primary business.In the background of financialization,I studied factors affecting financial asset allocation of Chinese listed companies,by which I divided assets into two parts: assets for financial investment and assets for main business.Meanwhile I divided the profit into two parts: profit from financial investment and profit from main business.Classical financial theory and behavioral finance theory are the two pillars of modern financial theory.This paper creatively introduced the behavioral financial aspects when it comes to the allocation of financial assets of non-financial listed companies.Multiple regression analysis was used to empirically examine the factors affecting the allocation of financial assets of non-financial listed companies during 2007-2016.By taking empirical test,I found that:The higher the risk of return on financial assets,the lower the proportion of financial assets of non-financial listed companies;the higher the risk of return on operating assets,the lower the proportion of operating assets showing a similar seesaw effect.The future performance of non-financial listed companies is positively related to the allocation of their financial assets.After further eliminating cash,the companies` future performance is negatively related to the ratio of financial assets held by non-financial listed companies showing the role of currency funds as a "water reservoir" for the company's production and business activities.At the same time,the management or shareholder of a listed company does consider the asset allocation of other listed company companies in the same industry when making asset allocation decisions,and tends to follow the actions of other companies to allocate financial assets.Research on several industries also shows that for different industries,governments or regulatory agencies may appropriately introduce targeted policies to activate the business' s enthusiasm.