Analysis of corporate financialization behavior and its influencing factors under external demand shocks

Yanan Guo, Hengyan Wang and Yunyun Wu

Finance Research Letters, 2025, vol. 77, issue C

Abstract: This paper examines the impact of external demand shocks on corporate financialization among China's A-share listed companies from 2012 to 2022. Our findings reveal that adverse external demand shocks significantly elevate the level of corporate financialization. Speculators' sentiment moderates this relationship, weakening the positive effect of external demand shocks on corporate financialization. Furthermore, adverse external demand shocks mitigate corporate financialization by reducing managerial overconfidence. Notably, both state-owned enterprises (SOEs) and non-SOEs tend to increase financial asset allocation in response to adverse external demand shocks, with non-SOEs exhibiting a more pronounced tendency.

Keywords: External demand shock; Corporate financialisation; Investor sentiment (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:77:y:2025:i:c:s1544612325003277

DOI: 10.1016/j.frl.2025.107063

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