The Inhibiting Effect Of The Accelerated Depreciation Policy On The Corporate Financialization

Since the 21^st century,the rapid growth of the financial industry has brought the prosperity of capital market as well as the wave of financialization.At the same time,the profit margin of traditional manufacturing industry has narrowed,the overcapacity has intensified,the technical transformation lags behind,and the profit gap between virtual economy and real economy has further differentiated,which results in the surge of capital to the financial industry and the deepening participation of manufacturing enterprises in financial activities.That's what we call"Corporate Financialization".The 2014Accelerated Depreciation Policy is an important measure taken to encourage the renovation of machines and equipment,stimulate the investment of fixed assets,and restrain the tendency of"Corporate Financialization",as well as an appropriate remedy to motivate the enterprises to focus on their main business.In terms of theory,this paper proves that on one hand Accelerated Depreciation Policy promotes the willingness of enterprises to invest in fixed assets by strengthening the tax shield of depreciation,and on the other hand weakens the"reservoir"and"substitution"motives of enterprises in allocating financial assets,which demonstrates that Accelerated Depreciation Policy could ease the tendency of"Corporate Financialization".Additionally,this paper analyzes the heterogeneity of the governance effect above from the perspective of market competition and financing cost.In terms of empirical analysis,this paper takes A-share listed manufacturing companies in China from 2010to 2018 as samples and conducts regression analysis by constructing a multi-group multi-period difference-in-difference?DID?model.The empirical results show that:?1?Accelerated Depreciation Policy alleviates the tendency of"Corporate Financialization",the channel of which is the promotion of fixed asset investment and the suppression of financial asset investment;?2?Compared with industries with low degree of market competition,the inhibiting effect of Accelerated Depreciation Policy on the tendency of"Corporate Financialization"is more significant in industries with high degree of market competition;?3?Compared with corporations with low financing cost,the inhibiting effect of Accelerated Depreciation Policy on the tendency of"Corporate Financialization"is more significant in corporations with high financing cost;?4?The increase in depreciation is the important channel of the promotion of fixed asset investment.Finally,this paper puts forward some policy suggestions,such as expanding the coverage of Accelerated Depreciation Policy,encouraging healthy market competition and providing preferential policies for corporations with financing difficulties.The main contribution of this paper is:?1?Theoretically,the existing literature almost didn't involve in the influence of tax on the tendency of"Corporate Financialization",and the research of Accelerated Depreciation Policy is also limited on the promotion of fixed assets.This paper studies the effect of tax on the tendency of"Corporate Financialization"and the influence of Accelerated Depreciation Policy on the configuration of financial assets,enriching the investigative perspectives of Accelerated Depreciation Policy and"Corporate Financialization";?2?In terms of research methods,the research of Accelerated Depreciation Policy is limited to the execution of Accelerated Depreciation Policy in 2014 without taking the expansion in 2015,whereas this paper comprehensively considers both time nodes and adopts the multi-group multi-period difference-in-difference?DID?model to analyze,making the result more scientific and complete.