Research On The Mechanism Of Financialization Affecting The Innovation Ability Of Family Enterprises

China's economy is in a critical period of transformation,but in sharp contrast to the real economy's recession,the financial industry and the real estate industry are hot.These two “high popularity” industries have attracted a large influx of industrial capital,which has caused the phenomenon of economic financialization to intensify.Enterprises are regarded as the micro-structure of macroeconomics,and the issue of financialization is also prominent.Many of them have serious financial problems,and the risk of excessive financialization deserves our vigilance.In addition,considering the particularity of corporate ownership in China,family business is quite different from other types of enterprises in many aspects,which means that the impact of financialization on family business may be different from other types of enterprises.Today,with the emphasis on the importance of innovation,more and more companies are putting innovation at the top of their strategy.Because the company's innovation activities have a long development cycle,consume a lot of resources and have high-risk characteristics,it is vulnerable to problems such as shortage of cash flow and insufficient investment in research and development.With the increasing degree of financialization,what impact will it have on the innovation ability of family businesses?Based on the two academic hotspots of corporate financialization and innovation,this paper attempts to study the impact of financialization on the innovation ability of family businesses.In theory,both the extrusion effect and the “reservoir” effect may be the result of the impact of financialization on the innovation ability of family businesses.And the "net effect" of financialization on the innovation ability of family business will be determined by the relative size of these two effects.This paper tests this by establishing a regression model.After that,in order to explore the specific path of financialization affecting the innovation ability of family enterprises,this paper takes the family enterprise R&D investment and the family enterprise internal cash flow as mediator variables,and tests it through the mediation effect model.In addition,this paper studies the inter-generational inheritance of family business and the political relationship of family business as a regulating factor to study the regulatory effect of the two on the innovation ability of family business.The above research comprehensively studies the related mechanisms of financialization affecting the innovation ability of family enterprises from different angles,which has certain theoretical and practical significance.This paper takes the 2008-2017 China A-share listed family business as a research sample.The empirical results show that: First,financialization has an adverse impact on the overall innovation ability of family enterprises,that is,the “reservoir” effect of financialization on the innovation ability of family enterprises.It is not as good as the "extrusion" effect;secondly,the results of the mediation effect test with reference to the practice of Wen Zhonglin et al.(2004)and Du Yong et al.(2019)show that financialization stimulates family business innovation by squeezing the R&D investment of family businesses and internal cash flow.The ability has an adverse impact,that is,R&D investment and internal cash flow are the mediators of the influence of financialization on the innovation ability of family enterprises.Thirdly,this paper finds that intergenerational inheritance and political connection of family business to financialization and family enterprise innovation ability The extrusion relationship plays a regulatory role.Family intergenerational inheritance and political connection will weaken the crowding out effect of financialization on the innovation ability of family enterprises.The innovations of this paper are as follows: First,this paper considers the issue of enterprise ownership,and the research on the financialization of family enterprises will enrich the research field of micro-enterprise financialization.Second,this paper uses the mediation effect model to test R&D investment and internal cash flow.The mediating effect of financialization on the innovation ability of family enterprises helps to understand more deeply the mechanism of financial influence on the innovation ability of family enterprises.Third,this paper will consider the influence of financialization on the innovation ability of family enterprises.Intergenerational inheritance and family business political connection as a regulating factor,test the intergenerational inheritance of family business and the political association of family business to the regulatory effect of financialization on the innovation ability of family enterprises,which is a more important study of the impact of financialization on the innovation ability of family enterprises.A comprehensive,deep perspective.