Can multiple blockholders restrain corporate financialization?

Jiang, Fuxiu; Shen, Yanyan; Cai, Xinni

doi:10.1016/j.pacfin.2022.101827

Cited by 31 publications

(25 citation statements)

References 45 publications

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“…Referring to previous research ( Jiang et al, 2022 ; Fu et al, 2024 ; Su et al, 2024 ), the control variables encompass firm size (Size), asset-liability ratio (Lev), operating cash flow ( CF ), profitability (ROA), fixed assets ratio (PPE), growth rate (Growth), enterprise value (TQ), listing age (Age), ownership concentration (First), institutional investor shareholding ratio (Ins), board size (Board), board independent (Dir), CEO duality (Dual). Size is the natural logarithm of the total assets.…”

Section: Methodsmentioning

confidence: 89%

“…Financial assets encompass trading financial assets, derivative financial assets, net loans and advances, available-for-sale securities, hold-to-maturity securities, and investment real estate. Monetary funds are excluded from our analysis as they primarily serve the daily operational needs of companies rather than generating profits ( Jiang et al, 2022 ). Since modern real estate increasingly shows typical virtual characteristics and gradually separates from the real sector, this paper includes investment real estate into the category of financial assets ( Zheng et al, 2024 ).…”

Section: Methodsmentioning

confidence: 99%

“…Firstly, it expands the research scope on the factors influencing corporate financialization at the corporate governance level. Existing literature primarily focuses on institutional arrangements for shareholders ( Shi et al, 2021 ; Jiang et al, 2022 ) and top management teams ( Qi and Fang, 2023 ) when examining these factors, with less attention given to the impact of board governance mechanisms. This study addresses this gap by empirically investigating the relationship between staggered boards and corporate financialization, thereby enhancing research on factors influencing corporate financialization from a board governance perspective.…”

Section: Introductionmentioning

confidence: 99%

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A study of the impact of staggered boards on corporate financialization: from the perspective of board governance

Cao,

Zhang

2024

Front. Psychol.

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IntroductionThe objective of this study is to assess the influence of staggered boards on corporate financialization and the role that incentive and supervision mechanisms play in this process.MethodsWe employ a total of 20,647 panel data samples of Chinese A-share listed companies over the period 2011-2020 to empirically test the impact of staggered boards on corporate financialization in the Chinese context.ResultsThe results indicate that implementing staggered boards significantly increases levels of corporate financialization. On the one hand, the implementation of a staggered board structure can exacerbate the speculative mindset and profit-driven behavior among board members, leading management to prioritize financial investments for personal gain. On the other hand, a staggered board system may also amplify managerial laziness, potentially incentivizing them to rely heavily on financial investments in order to swiftly achieve performance targets with minimal effort. Furthermore, both managerial ownership and audit supervision are found to be critical factors in mitigating this positive impact and preventing excessive financial investment behavior.DiscussionThis paper offers guidance on comprehending the applicability of staggered board provisions and mitigating financial risks in enterprises.

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Section: Methodsmentioning

confidence: 89%

Section: Methodsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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A study of the impact of staggered boards on corporate financialization: from the perspective of board governance

Cao,

Zhang

2024

Front. Psychol.

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“…Thus, this demonstrates that the excessive engagement of non-financial capital enterprises in financial business development has certain negative effects on individuals, enterprises, and society, although the development of corporate financialization promotes the rapid development of enterprises to a certain extent; moreover, to curb corporate financialization, it is necessary to explore the reasons behind the influence of corporate financialization. The literature on the causes of corporate financialization mainly covers shareholder value creation pressures (Modell & Yang, 2018), technological and ideological changes (Davis & Kim, 2015), trust structures (Harrington, 2017), employee stock ownership plans (Feng et al, 2022a), business diversification (Feng et al, 2022b), multiple blockholders (Jiang et al, 2022), and increases in the cash holdings of non-financial firms, and it provides support for the possibilities that traditional non-financial firms are increasingly engaging in for-profit lending (Davis, 2018). While most of these influences have been studied only in terms of corporate behavior and social relations, few studies have explored how institutional reforms and related policy implementations can influence corporate financialization.…”

Section: Introductionmentioning

confidence: 99%

Can green credit policy under the concept of green economy curb corporate financialization to promote sustainable development?

Strielkowski²,

Li³

et al. 2023

Front. Environ. Sci.

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Under the concept of green economy, discovering how to utilize the Green Credit Guidelines in a way that guides enterprises to focus on their industries and to promote sustainable development has become an important and urgent objective. It is also conducive to the successful implementation of the “double-carbon target”. This paper uses Chinese A-share listed enterprises from 2007–2018 as its research object to explore whether green credit policy is conducive to reducing the financialization behavior of heavily polluting enterprises to curb their transformation from real to virtual. It is found that the financialization of heavily polluting enterprises has significantly decreased since the implementation of the Green Credit Guidelines in 2012, and these results remain unchanged after a series of robustness tests. A heterogeneity analysis shows that state-owned enterprises are subject to stronger policy effects than non-state-owned enterprises; furthermore, the studied policy effects are stronger in the eastern regions of China than in its central and western regions, and these effects are stronger in green provinces than in polluting provinces. A mechanism study finds that credit constraints and corporate innovation play a partially mediating role in the effect of green credit policy on corporate financialization. Further studies find that both the level of internal corporate governance and external monitoring contribute to the disincentivizing effect of green credit policy on financialization. Moreover, through an exploration of the possible economic consequences of the examined policy, it is found that the green credit policy reduces corporate financialization in favor of reducing inefficient corporate investment and major shareholders’ tunneling so that the level of corporate investor protection is improved. The findings validate the effectiveness of the Green Credit Guidelines and provide empirical evidence and empirical support for reducing corporate financialization to curb enterprises’ transformation from real to virtual and thus promoting the development of sustainability.

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“…Currently, the literature pays more attention to the in uencing factors of corporate nancialization. Studies have shown that the factors affecting corporate nancialization are multifaceted, including micro factors such as physical investment, nancing constraints, and equity structure (Jiang et al, 2022;Xu & Xuan, 2021), as well as macro factors such as economic uncertainty and nancial regulation (Cheng & Masron, 2023;Huang et al, 2023). However, most of the above literature develops the discussion from a nancial perspective, relatively ignoring the impact of government scal activities.…”

Section: Introductionmentioning

confidence: 99%

Does the Value-added Tax Reform Restrain Corporate Financialization? Based on the Perspective of Credit Refund Policy

Xuefeng,

Longqi

2023

Preprint

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This paper studies the impact of tax reform on corporate financialization based on the sample data of China's A-share manufacturing industry. Using the VAT credit refund policy in China as an exogenous shock to conduct a difference-in-differences estimation, we find that the credit refund policy can significantly inhibit corporate financialization. The intermediary mechanism shows that the credit refund policy has a restraining effect on corporate financialization by alleviating cash flow constraints and encouraging the investment scale of the core business. The heterogeneity test shows that the policy effect is more obvious in non-state-owned enterprises, non-eastern regions, and enterprises with higher financial constraints. These findings have important implications for promoting VAT reform and governing corporate financialization. JEL Classification G30 H20

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Can multiple blockholders restrain corporate financialization?

Cited by 31 publications

References 45 publications

A study of the impact of staggered boards on corporate financialization: from the perspective of board governance

A study of the impact of staggered boards on corporate financialization: from the perspective of board governance

Can green credit policy under the concept of green economy curb corporate financialization to promote sustainable development?

Does the Value-added Tax Reform Restrain Corporate Financialization? Based on the Perspective of Credit Refund Policy

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