Exploring the links between bank competition, economic policy uncertainty, and corporate financialization

Sheng Wang, Haifeng Meng and Zhisheng Chen

Finance Research Letters, 2025, vol. 78, issue C

Abstract: This paper examines the relationship between bank competition and corporate financialization using annual data from non-financial firms listed on the Chinese A-share market from 2012 to 2022. The results indicate that heightened bank competition significantly promotes corporate financialization, with a positive correlation observed: the greater the intensity of competition, the higher the level of corporate financialization. The study further reveals that financing constraints partially mediate this relationship, suggesting that bank competition alleviates financing constraints, leading firms to allocate more funds to financial assets. Moreover, economic policy uncertainty is found to have a dual effect: it directly propels corporate financialization while indirectly dampening the responsiveness of corporate financialization to bank competition.

Keywords: Bank competition; Financing constraints; Economic policy uncertainty; Corporate financialisation (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1544612325003630
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:78:y:2025:i:c:s1544612325003630

DOI: 10.1016/j.frl.2025.107100

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().