Does foreign demand affect corporate financialization? Some evidence from China

Tayier Tudi, Ji Wu, Minghua Chen and Bang Jeon

Emerging Markets Review, 2025, vol. 65, issue C

Abstract: We investigate whether foreign demand influences corporate financialization using data from over 1700 Chinese non-financial firms during 2007–2016. Our findings consistently reveal a negative relationship, indicating that firms increase their financial asset holdings and more actively engage in financial transactions when foreign demand declines, and vice versa when foreign demand rises. Foreign demand shapes firms' financialization by influencing their returns from real investments and financial constraints. Furthermore, we explore heterogeneous impacts of foreign demand across different financial assets, industries, and indebtedness levels in firms.

Keywords: Corporate financialization; Foreign demand; China (search for similar items in EconPapers)
JEL-codes: F14 G30 G32 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:65:y:2025:i:c:s1566014124001274

DOI: 10.1016/j.ememar.2024.101232

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