Corporate financialization and investment efficiency: Evidence from China

Cynthia M. Gong, Pu Gong and Mengting Jiang

Pacific-Basin Finance Journal, 2023, vol. 79, issue C

Abstract: This study analyzes the financialization impact on investment efficiency and the mechanism using data from listed nonfinancial companies in China from 2011 to 2020. Results reveal that financialization has a positive effect on investment efficiency. Cross-sectional tests show that corporate financialization can significantly improve the investment efficiency of local state-owned enterprises (SOEs) and non-SOEs, and enterprises in eastern and central China. According to mechanistic analysis, the study also finds that corporate financialization improves investment efficiency by alleviating financing constraints. By suggesting the government unblock financing channels and increase capital liquidity, our findings can guide the financial sector to better serve the real economy.

Keywords: Corporate financialization; Investment efficiency; Financing constraint (search for similar items in EconPapers)
JEL-codes: G30 G31 G38 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0927538X23001117
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:pacfin:v:79:y:2023:i:c:s0927538x23001117

DOI: 10.1016/j.pacfin.2023.102045

Access Statistics for this article

Pacific-Basin Finance Journal is currently edited by K. Chan and S. Ghon Rhee

More articles in Pacific-Basin Finance Journal from Elsevier
Bibliographic data for series maintained by Catherine Liu ().