Research On The Influence Of Enterprise Financialization On Total Factor Productivity

During the last ten years,China’s GDP has grown at an average annual rate of more than 6.5%,well above the world average.China is now the world’s second largest economy.To prepare for future development and change,President Xi Jinping first introduced the concept of "promoting quality development".In the report of the20 th Party Congress,greater emphasis is placed on the quality,efficiency and sustainability of economic development.The report stresses that China should lead innovation-driven quality development,which requires domestic enterprises,large and small,to focus on innovation and R&D investment,as well as on transforming the results of innovation,improving total factor productivity and ultimately achieving quality economic development.According to the report.Total factor productivity measures the efficiency of output generated by the factors of production,labor and capital,in a country and is considered an important indicator for monitoring a country’s long-term economic growth potential.With the development of national economies and increasing market competition,real enterprises have begun to allocate financial assets to improve their performance through financial means in the face of excessive return stimulation from the financial sector.The financing of real enterprises is of great interest to researchers because it has led to the "dematerialization" of the economy to some extent.The allocation of financial assets by real enterprises can be motivated by various factors,and financialization based on precautionary reserve motives contributes to reducing the financing constraints of real enterprises and improving the efficiency of capital use.Conversely,financial asset allocation based on speculative motives can lead to a mismatch of resources that affects the productivity of firms,reducing total factor productivity.In this context,investigating the extent to which the financialization behavior of real firms leads to improvements in total factor productivity is important for promoting quality economic development and encouraging "de-blooming" of the economy.This study examines the relationship between firm financialization and total factor productivity using a sample of listed real firms during the period 2014-2021 to test the mediating effect of "firm innovation".In addition,two variables,the firm’s local market process and the type of firm ownership,are included in the analytical framework to investigate the role of moderation in the financialization process affecting total factor productivity.The theoretical and empirical analysis revealed the following.(1)Real firms have a negative effect on total factor productivity(TFP)growth,and this negative effect has a permanent impact on TFP.(2)Firm innovation plays a mediating role in the impact of firm financialization on TFP,and deepening firm financialization reduces TFP by inhibiting firm innovation.(3)By including marketization as an adjustment variable,this paper finds that the negative effect of financialization on TFP is significantly smaller in regions with a high degree of marketization.(4)By introducing a correction variable,ownership type,this paper finds that the negative effect of SOE financialization on TFP is stronger.