Corporate financialization and the long-term use of short-term debt: Evidence from China

Yan Chen and Ruiqi Sun

Finance Research Letters, 2023, vol. 58, issue PD

Abstract: Using data from Chinese A-share listed companies from 2007 to 2022, we investigate the impact of financialization on the long-term use of short-term debt (LUSD). The results indicate that greater financialization leads to increased utilization of LUSD. The rise of financialization has reduced equity financing and long-term bond financing for firms, pushing them towards using short-term loans instead of long-term investments. Furthermore, the impact of financialization on LUSD is amplified by both rising financing costs and a higher degree of financing constraints. Our study additionally establishes that enterprises with smaller scale, shorter operating periods and greater operational risk are more likely to be impacted by financialization and, hence, show an increased utilization of LUSD.

Keywords: Financialization; Debt maturity structure; Corporate finance; Capital structure (search for similar items in EconPapers)
JEL-codes: 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 (3)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1544612323009741
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:58:y:2023:i:pd:s1544612323009741

DOI: 10.1016/j.frl.2023.104602

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().