Institutional investors’ site visits and corporate financialization in China

Yongjia Lin, Hong Deng and Yizhi Wang

International Review of Financial Analysis, 2025, vol. 97, issue C

Abstract: This paper examines the influence of institutional investors’ site visits on corporate financialization of heavily polluted enterprises in China. We find that these visits significantly restrain corporate financialization, and this effect is robust after addressing concerns of endogeneity. Mechanism analyses show that institutional investors’ site visits affect corporate financialization by alleviating financing constraints and improving corporate governance. We also show that the impact is more pronounced for companies operating in regions with poor information environments, weaker financial development, and less robust legal frameworks. Moreover, our finding reveals that the impact is significant only for firms that are visited by “independent” institutional investors.

Keywords: Institutional investor; Corporate site visits; Corporate financialization; China’s polluted sectors (search for similar items in EconPapers)
JEL-codes: G23 G34 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:97:y:2025:i:c:s1057521924007841

DOI: 10.1016/j.irfa.2024.103852

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