The impact of common institutional ownership on financialization in non-financial enterprise: Exacerbation or inhibition?

Zihao Ning, Zhibo Xu and Pengju Zheng

Finance Research Letters, 2024, vol. 69, issue PB

Abstract: This paper proposes that common institutional ownership positively affects the non-financial firm financialization by using data from Chinese listed firms from 2007 to 2022. The findings reveal that information asymmetry and financial constraints emerge as significant transmission mechanisms between common institutional ownership and firm financialization. Moreover, this positive relationship is more pronounced in state-owned enterprises, firms audited by non-Big 4 auditors, and those facing weaker market competition.

Keywords: Common institutional ownership; Enterprise financialization; Information asymmetry; Financing constraints (search for similar items in EconPapers)
JEL-codes: G11 G32 G34 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:69:y:2024:i:pb:s1544612324012261

DOI: 10.1016/j.frl.2024.106197

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