Research On The Impact Of Corporate Financialization On Corporate Value

In recent years,China's economic growth has slowed down structurally.The entity operating environment has been deteriorating due to rising costs,insufficient demand and low innovation capacity.The entity industrial investment rate has continued to decline,and the profitability of entity industrial operations is also not optimistic.Many entity enterprises are struggling and on the verge of bankruptcy.Although China has successively introduced a large number of industrial policies and countermeasures and promoted supply-side structural reform,the pressure on the development of entity enterprises has not decreased.In sharp contrast,the pan-financial sectors,such as finance and real estate,have maintained ultra-high profit margins and continued industrial expansion by virtue of their policy and industry advantages.As the entry barriers to finance are reduced,more and more companies deploy funds in the financial sector through the integration of internal resources.According to the database of CSMAR,the total amount of financial assets held by China's A-share listed entity companies have grown rapidly from 2008 to 2017: compound annual growth rate reaches 17.61%.Although the average holding share of financial assets started to decline after 2009 due to the impact of the financial crisis,it has gradually increased since 2012.In 2017,it has exceeded the average holding level of 2009.It can be seen that financial investment has become a typical feature of Chinese enterprises at this stage.Then,as an investment strategy of the enterprise,what impact will financialization have on ultimate goal of the enterprise—enterprise value? How does this influence affect corporate value? If the characteristics of the company and the external environment change,will this influence change? The answers to these questions help the government to alleviate the economic "shift from real to virtual" and help enterprises to understand the consequences of financialization strategy.So,this paper takes China's a-share non-financial listed companies from 2008 to 2017 as research samples,exploring the relationship between enterprise financialization and enterprise value through empirical research.The paper also explores the mechanism of the relationship between enterprise financialization and enterprise value.The impact of the nature of property rights and monetary policy on the relationship has also been investigated.The results of this study show that:(1)The level of financialization of China's entity enterprises has steadily increased since 2012,and the level of financialization in the eastern region,state-owned enterprises and non-manufacturing companies is higher.(2)In the process of financialization,the corporate motives of "preventive savings" and "speculative arbitrage" coexist.On the whole,The financialization of enterprises and the value of enterprises are not a simple positive or negative relationship,but an type quadratic curve relationship.When the financialization is moderate,the effect of the cistern effect is greater than the squeeze effect.That can increase corporate value,but excessive financialization will adversely affect corporate value.The relationship between corporate financialization and investment efficiency is also an type quadratic curve.The optimal financialization level can maximize the investment efficiency of enterprises.The investment efficiency plays a mediating role in the relationship between enterprise financialization and enterprise value.(3)Different properties of property rights will cause the relationship between corporate financialization and corporate value to change.Then type relationship between them mainly exists in non-state-owned enterprises.The relationship between the financialization strategy of state-owned enterprises and enterprise value is mainly insignificant negative correlation.This shows that,in terms of the nature of property rights,the financialization motive of coexistence of "preventive savings" and "speculative arbitrage" is only reflected in non-state-owned enterprises which live in a weaker operating environment.(4)Monetary policy also affects the relationship between enterprise financialization and enterprise value.During the period of tightening monetary policy,the relationship between them isn-shaped.During the period of loosening monetary policy,the relationship between them is not significant.This shows that in the period of tightening monetary policy,the "preventive savings" motivation of enterprises is more obvious,and the "reservoir" role of financial assets can be better exerted.Based on the research results of this paper,the article puts forward corresponding policy recommendations from the government and enterprise levels.Theoretically,The research ideas and empirical results of this paper not only supplement the relevant blank of the consequences of enterprise financialization,but also deepen the relevant theories of the impact of asset structure on enterprise value;In reality,the research results can help enterprises realize the impact of the allocation of financial assets on their own development and optimize the allocation of financial assets to achieve the "integration of industry with finance".On the other hand,these conclusions will help the government formulate policies to accurately control the "shift from real to virtual",Guide finance to restore its service nature and prevent systemic financial risks.