A study on the motivation of financialization in emerging markets: The case of Chinese nonfinancial corporations

Xu, Xingmei; Xuan, Chao

doi:10.1016/j.iref.2020.12.026

Cited by 85 publications

(38 citation statements)

References 20 publications

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“…As mentioned above, the literature rarely focuses on the relationship between financialization and the R&D investment of manufacturing enterprises, and the research conclusions are inconsistent. Using Heckman's two-step approach, which resolves the potential sample selection bias, this paper found a linear negative relationship between financialization and the R&D investment of manufacturing enterprises, which is consistent with the research conclusions of Xu and Xuan [28], Seo et al [6], and Su and Liu [29], but different from those of Pan and Wang [30] and Li et al [31]. On this basis, through the innovative introduction of government subsidies in the analysis, this paper provides new insights, in that government subsidies have a negative moderating effect for the relationship between financialization and the R&D investment of manufacturing enterprises.…”

Section: Discussionsupporting

confidence: 86%

“…To date, a great deal of the literature has focused on the economic consequences of corporate financialization from perspectives such as industrial investment, profitability, and productivity [5,[17][18][19][20][21][22][23][24][25][26][27][28]. However, there are few studies on the impacts of financialization on manufacturing's R&D input (Considering literature on the effect of corporate financialization on R&D investment is rare, and our work is related to the literature that studies the impact of financialization on a firm's physical investment in general, we also review the relevant literature).…”

Section: Introductionmentioning

confidence: 99%

“…Furthermore a consensus has not been reached regarding the relationship between corporate financialization and R&D investment or physical investment. Most empirical studies show that financialization has constituted the main physical investment of non-financial corporations [17,18,[23][24][25][26], and Seo et al [6], Su and Liu [29], Xu and Xuan [28] confirm a negative relationship between corporate financialization and R&D investment. A fraction of studies contend that corporate financialization does not have a negative influence on the fixed investment of non-financial corporations (NFCs) [20,21], and it even imparts a significant promotion impact [22].…”

Section: Introductionmentioning

confidence: 99%

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Financialization, Government Subsidies, and Manufacturing R&D Investment: Evidence from Listed Companies in China

Zhou

Liu

2021

Sustainability

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Increasing research and development (R&D) investment is the key to the sustainable development of the manufacturing industry. With the development of financialization, manufacturing enterprises allocate greater funds to the financial field, which may significantly affect their level of R&D investment. However, few studies have explored the relationship between the two. Using the data of manufacturing listed companies in China from 2007 to 2018, this paper investigates the impact of financialization on manufacturing R&D investment and further analyzes the moderating effect of government subsidies on the relationship between the two, mainly using Heckman’s two-step approach. The results show that, on the whole, financialization has a significant restraining effect on China’s manufacturing R&D investment, and that government subsidies exacerbate this negative effect. However, there are some differences in the statistical significance and in the level of influence of financialization on R&D investment, which are based on enterprise type, industry, region, and financing constraints. Additionally, the moderating effects of government subsidies under heterogeneous samples differ in sign, statistical significance, and impact magnitude. This paper not only conducts a comprehensive study on the impact of financialization on manufacturing R&D investment but also introduces government subsidies as the moderating variable into the analysis, which is conducive to a better understanding of the relationship between corporate financialization and manufacturing R&D investment in China.

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Section: Discussionsupporting

confidence: 86%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Financialization, Government Subsidies, and Manufacturing R&D Investment: Evidence from Listed Companies in China

Zhou

Liu

2021

Sustainability

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“…In this case, enterprises intend to obtain higher profits from financial investments rather than the main business, which would ultimately been "replaced" by financial assets (Hu et al, 2017;Xun et al, 2017). A large number of studies have shown that the profit purpose is the main purpose when allocating financial assets in Chinese enterprises (Qi et al, 2021;Su and Liu, 2021;Xu and Xuan, 2021). Most of the main businesses of Chinese family enterprises belong to the real economy.…”

Section: Financialization Of Enterprisesmentioning

confidence: 99%

The intergenerational succession and financialization of Chinese family enterprises: Considering the influence of heirs’ growing experience

Wang

et al. 2022

Front. Psychol.

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As a mixed-methods research in economics and psychology, this study aimed to analyze the influence from the intergenerational succession on the financialization level including asset financialization and revenue financialization, and further test the moderating effect of the heirs’ typical growing experience according to The Imprinting Theory, based on the 2009–2020 annual data of listed family enterprises of China. There were two key findings. First, the effect of Chinese family enterprises’ intergenerational succession on asset financialization was positively significant while the effect on revenue financialization was not significant, indicating that the financialization behavior has not brought about effective financial profits. Second, among the heirs’ typical growing experiences, their parents’ entrepreneurial experience during their childhood, oversea study experience, and MBA education experience had the significantly positive moderating effects on the influence from intergeneration succession to asset financialization level of Chinese family enterprises, which was an important internal mechanism for the heirs to promote the financialization process of family enterprises.

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“…At the same time, researchers tried to insert some caution by pointing out that some financial assets might actually support investment (Davis, 2018a) and that interest rates might exert greater influence over firms' decisions than financial investment in general (Clévenot et al., 2010). Outside the global triad of the United States, Europe, and Japan, economists further identified elements of corporations' “portfolio choice,” namely that during brisk times of financial liberalization some NFCs did invest in financial assets in order to improve their bottom lines (Xu & Xuan 2021), increase their payouts (Seo et al., 2012) or compensate for declining operating incomes (Akkemik & Özen, 2014; Demir, 2007, 2009a, 2009b; Tellalbaşı & Kaya, 2013). Most studies, therefore, agreed that financial cycles had major effects on what they considered corporate financialization.…”

Section: A Structured Review Of the Literaturementioning

confidence: 99%

Whither corporate financialization? A literature review

2021

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In this paper, we review the burgeoning literature on the study of corporate financialization, distinguishing three strands of empirical, quantitative studies: (1) national-level and macro-comparative analysis, (2) sector-and firm-level analysis, and (3) econometric studies. We argue that corporations should be studied in their spatial organization.The spatial organization of the firm can be used to obscure corporate activity. Geography is not simply one of the many features of corporate structure but is key to it and therefore fundamental to shaping corporate financialization, although this is insufficiently expressed in accounting principles that provide consolidated accounts. Finally, we suggest four avenues for future studies: (1) to expand the geographical and temporal scope of research; (2) to pay close attention to how indicators are constructed; (3) to deconstruct large categories of analysis, such as 'financial assets'; (4) to systematically include liabilities in the analysis of non-financial corporations, especially in the face of the abundance of credit.

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A study on the motivation of financialization in emerging markets: The case of Chinese nonfinancial corporations

Cited by 85 publications

References 20 publications

Financialization, Government Subsidies, and Manufacturing R&D Investment: Evidence from Listed Companies in China

Financialization, Government Subsidies, and Manufacturing R&D Investment: Evidence from Listed Companies in China

The intergenerational succession and financialization of Chinese family enterprises: Considering the influence of heirs’ growing experience

Whither corporate financialization? A literature review

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