Corporate Financialization, Financing Constraints, and Environmental Investment

Lan Tao, Lianfang Chen and Kun Li
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Lan Tao: School of Economics and Management, China University of Geosciences, Wuhan 430074, China
Lianfang Chen: School of Economics and Management, China University of Geosciences, Wuhan 430074, China
Kun Li: School of Economics and Management, China University of Geosciences, Wuhan 430074, China

Sustainability, 2021, vol. 13, issue 24, 1-17

Abstract: This paper took non-financial listed companies on A-shares from 2014 to 2018 as samples to empirically test the relationship between corporate financialization, financing constraints, and environmental investment. The empirical results showed that the degree of corporate financialization is negatively related to environmental investment, and the negative relationship between long-term financial assets and environmental investment is more significant. Financialization has a “crowding out” effect on environmental investment when the firm is a non-state enterprise or a small-scale enterprise. Financialization has a “reservoir” effect on environmental investment when it is subject to less financing constraints. Further analysis revealed that both long-term and short-term financial assets have an inhibiting effect on environmental investment when environmental regulations are stringent. This paper provides a theoretical reference for companies to make investment decisions on financial assets and to improve their ability on environmental investment and green sustainability.

Keywords: corporate financialization; financing constraints; environmental investment (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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