Corporate Financialization,Corporate Governance And Firm Innovation

Innovation activities create substantial firm value and provide a steady stream of power for enterprise development,but they are often characterized by large investment and high uncertainty.With the rapid development of China's financial industry and the continuous acceleration of corporate financialization,financial assets with strong flexibility and high returns have gradually become new choices for corporate investment,and corporate funds have gradually flowed from operating activities to financial markets.Enterprise innovation requires a steady stream of financial support.The allocation of financial assets can help companies broaden financing channels and smooth corporate funding requirements,providing financial support for corporate innovation.However,in the case of limited corporate resources,excessive allocation of financial assets will inevitably affect the improvement of corporate innovation capabilities.Therefore,exploring the impact of the financialization of China's non-financial enterprises on innovation efficiency is of great significance for further clarifying the consequences of financial asset investment and promoting the innovation development of China's real economy development.Using a sample of Chinese listed firms for the period of 2011-2017,this article elaborates on the mechanism of financialization affecting innovation efficiency from the perspective of capital reserve motivation and profit-seeking motivation based on precautionary savings theory,portfolio theory,agency theory,and institutional theory.This paper examines the relationship between the financialization of NFCs and innovation efficiency by the fixed-effect model.Considering that corporate governance level plays a key role in corporate asset allocation decisions,this paper uses the principal component analysis method to construct internal and external corporate governance comprehensive indexes,and further explores the moderate role of corporate governance on “financialization-innovation efficiency” nexus.Finally,this paper introduces innovation investment and uses the intermediary test model to test the mechanism of financialization affecting innovation efficiency.This article draws the following conclusions:(1)Corporate financialization manifests as a “reservoir” effect,that is,financialization promotes the improvement of innovation efficiency;(2)Holding different types of financial assets has different effects on innovation efficiency;(3)Both internal and external corporate governance are positively regulating the relationship between financialization and innovation efficiency,that is,the higher the level of internal and external corporate governance,the stronger the role of financialization in promoting innovation efficiency;(4)Innovation input plays a full intermediary effect in the mechanism of “financialization-innovation efficiency” nexus,that is,financialization affects innovation efficiency by affecting the innovation input of enterprises.