The financialization of nonfinancial companies in China: A macroeconomic perspective

Baochen Yang and Fengrui Chen

Finance Research Letters, 2023, vol. 53, issue C

Abstract: We examine the convergence of corporate financialization and the impact of macroeconomic changes on corporate financialization in Chinese nonfinancial listed companies. Strong evidence suggests that multiple convergence clubs exist and that macroeconomic changes play an essential role in their composition. Economic growth and financial development positively affect corporate financial asset allocation, while monetary policy negatively affects corporate financial asset allocation. Given macroeconomic changes, companies with high financial investment profitability and low financing constraints tend to allocate more to financial assets. In contrast, companies with poor financial investment performance and limited financing capacity do not have significant financial investment preferences.

Keywords: Corporate financialization; Economic growth; Financial development; Monetary policy; Club convergence (search for similar items in EconPapers)
JEL-codes: E44 G30 O16 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:53:y:2023:i:c:s1544612322005840

DOI: 10.1016/j.frl.2022.103407

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