Futures Trading and Corporate Financialization: A Quasi‐Natural Experiment From the Launch of China's Crude Oil Futures

Feng He, Longxuan Chen, Jing Hao and Dongfeng Chang

Journal of Futures Markets, 2025, vol. 45, issue 7, 732-751

Abstract: This study examines the impact of China's crude oil futures trading on corporate decision‐making at the firm level. By analyzing Chinese listed companies spanning from 2010 to 2022, we identify a significant negative causality of China's crude oil futures trading on the degree of financialization in energy‐dependent enterprises. Mechanism analysis further demonstrates that China's crude oil futures trading substantially strengthens corporate risk management capacity, thereby reducing precautionary motivations for financial asset holdings. Specifically, energy‐dependent firms exhibit a marked propensity to reallocate short‐term liquidity from financial investments to crude oil futures positions. Heterogeneity analysis shows that the impact of China's crude oil futures on the financialization level of energy‐dependent firms is more pronounced among state‐owned enterprises and firms facing heightened competitive pressures. This paper offers micro‐level insights into the relationship between commodity futures trading and corporate decision‐making, emphasizing the significance of financial innovation in supporting China's real economy development.

Date: 2025
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