A model for measuring over-financialization: Evidence from Chinese companies

Lixia Wang, Neng Hao, Hui Fang, Maoguo Wu and Xinlei Ma

Finance Research Letters, 2023, vol. 51, issue C

Abstract: This study develops a model of measuring over-financialization. We use a novel approach for modeling over-financialization when the actual financialization degree is over the target level. We test this model using data from the capital market of China. The findings are: (1) theoretically, our model can accurately distinguish over-finanialization from financialization of listed companies; (2) empirically, we analyze the company characteristics that affect over-financialization. We find that (a) state-owned enterprises tend to restrain from over-financialization; (b) the size of enterprises has a significant negative correlation with over-financialization; (c) there are significant differences in corporate over-financialization across different regions.

Keywords: Dual-risk factor; Financialization; Moderate financialization; Over-financialization (search for similar items in EconPapers)
JEL-codes: G11 G32 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:51:y:2023:i:c:s1544612322006043

DOI: 10.1016/j.frl.2022.103427

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