The Influence Of Financialization Of Entity Enterprises On Main Business Performance

In recent years,due to the “de-reality” of the economy,the proportion of financial assets in total assets has increased year by year,investment real estate has grown particularly fast,and R&D investment has been decreasing,leading to a slow development of the main business of the entity.The financial industry,especially investment real estate,has a higher return on capital than non-financial and non-real estate industries.Driven by the profit-seeking of capital,a large amount of industrial capital flows into the financial and real estate industries,the virtual economy is accelerating,and the entity is showing a “financialization” trend,which is a challenge to the performance of the main business of China’s entity enterprises.This paper attempts to sort out the previous literature on financialization.On this basis,it divides financialization into two dimensions: financialized degree and financialized structure,and studies the impact on the performance of the main business and the path of influence.Firstly,the financialized degree is defined as the proportion of financial assets allocated to enterprises,and the financial zed structure is defined as the proportional between investment real estate and other financial assets.Secondly,it analyzes the status quo of financialization of entity enterprises,and analyzes the mechanism of financialized degree and financialized structure affecting the performance of main business,proposing research hypotheses.Then,it constructs an empirical model and selects the panel data of A-share,non-financial and non-real estate companies in China’s Shanghai and Shenzhen stock markets from 2013 to 2017 for empirical analysis to test the research hypothesis.Finally,the horizontal comparison of the entity enterprises into large and small enterprises by scale.The analysis shows that there is an inverse U-shaped nonlinear relationship between the financialized degree and the performance of main business,and shows the financialized structure negatively affects the performance of main business,and R&D investment plays a mediating role in the process of influence.Based on the above research conclusions,this paper puts forward to relevant suggestions on government policies.First,to strengthen the supervision of financial activities of entity enterprises,preventing funds from “de-reality”.Second,to regulate the investment real estate market fundamentally,as far as possible reducing the speculative behavior of the entity.Third,to strengthen the industrial policy supporting for the R&D and innovation of the entity,and improve the return on investment of the entity.Fourth,to distinguish the different scales and development models of the enterprise and guide the entity to allocate financial assets rationally.The main innovation points of this paper are the following:First,the financialization is decomposed into two dimensions: financialized degree and financialized structure,trying to explore the impact of financialization from multiple perspectives.The former coordinates the “reservoir” effect and the “crowding out” effect of financial assets,while the latter explores the impact of holding ratio of different financial asset on the performance of the main business.Second,based on the perspective of intermediary variables,this paper further studies the partial mediation effect of R&D investment,analyzing the negative impact of financialized structure on R&D investment,and then indirectly negatively affects the main business.Third,based on the perspective of the different size,this paper studies the impact of financialization of entities of different scales on their main business performance,firstly conducting research at the overall level,then conducting horizontal comparative study according to the different enterprise scale.The main shortcomings of this paper are as follows: First,due to the lack of data collection,the time span of research is short;secondly,based on data validity and predecessor’s model construction,the variable and theoretical mechanism are still to be improved.