A U-shaped relationship between real financialization and financial risk: Evidence from a single threshold model

Xiang Yan, Xuefang Wang and Sheng Liu

Finance Research Letters, 2023, vol. 56, issue C

Abstract: Financialization plays an important role in promoting economic development. This paper discusses the motivations and impacts of enterprises' financialization, and introduces the current state of China's economic development and the current state of China's business economy to deepen the understanding of economic trends. It also examines the impact of enterprises' financialization on financial risk using a threshold model. The results show a U-shaped relationship between entity enterprises' financialization and financial risk: financialization helps reduce financial risk when the level of financialization reaches 0.45%.

Keywords: Entity enterprise; Financial risk; Single threshold effect; “U” shaped relationship (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:56:y:2023:i:c:s1544612323003896

DOI: 10.1016/j.frl.2023.104017

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