Enterprise financialization and R&amp;D innovation: A case study of listed companies in China

Yue Liu; Jinzhi Liu; Lichang Zhang; Yue Liu; Jinzhi Liu; Lichang Zhang

doi:10.3934/era.2023124

Electronic Research Archive

2023, Volume 31, Issue 5: 2447-2471. doi: 10.3934/era.2023124

Previous Article Next Article

Research article Special Issues

Enterprise financialization and R&D innovation: A case study of listed companies in China

Business School, Hunan Institute of Technology, Hengyang 421000, China

Received: 19 January 2023 Revised: 14 February 2023 Accepted: 16 February 2023 Published: 02 March 2023

In financial asset allocation, enterprises adjust their investment in R&D innovation according to their motives and the external environment. Based on a review of the literature related to enterprise financialization and R&D innovation, this paper proposes research hypotheses through theoretical analysis first; then, taking China's A-share non-financial listed companies from 2010 to 2019 as research objects, this paper explores the relationship between enterprise financialization and R&D innovation with a quantile panel data model; further, the heterogeneous relationship between the two under different business cycle phases is empirically analyzed. The following conclusions are drawn. First, there is a dynamic relationship between enterprise financialization and R&D innovation, varying with different financing constraints. Second, the dynamic relationship between enterprise financialization and R&D innovation stems from the motivation difference in enterprise asset allocation. Third, there are significant differences in the dynamic relationship at different business cycle phases.

Keywords:

Citation: Yue Liu, Jinzhi Liu, Lichang Zhang. Enterprise financialization and R&D innovation: A case study of listed companies in China[J]. Electronic Research Archive, 2023, 31(5): 2447-2471. doi: 10.3934/era.2023124

Related Papers:

[1]	Yifeng Wang . Journal summary from Editor in Chief. AIMS Environmental Science, 2024, 11(3): 380-380. doi: 10.3934/environsci.2024018
[2]	Yifeng Wang . Journal summary from Editor in Chief. AIMS Environmental Science, 2025, 12(2): 252-252. doi: 10.3934/environsci.2025011
[3]	Yifeng Wang . Journal summary from Editor in Chief. AIMS Environmental Science, 2021, 8(2): 100-100. doi: 10.3934/environsci.2021007
[4]	Yifeng Wang . Journal summary from Editor in Chief. AIMS Environmental Science, 2023, 10(2): 245-245. doi: 10.3934/environsci.2023014
[5]	Yifeng Wang . Journal summary from Editor in Chief. AIMS Environmental Science, 2018, 5(1): 64-66. doi: 10.3934/environsci.2018.1.64
[6]	Yifeng Wang . Journal summary from Editor in Chief. AIMS Environmental Science, 2016, 3(1): 140-140. doi: 10.3934/environsci.2016.1.140
[7]	Yifeng Wang . Journal summary from Editor in Chief. AIMS Environmental Science, 2019, 6(4): 262-264. doi: 10.3934/environsci.2019.4.262
[8]	Yifeng Wang . Journal summary from Editor in Chief. AIMS Environmental Science, 2020, 7(2): 153-155. doi: 10.3934/environsci.2020009
[9]	Yifeng Wang . Journal summary from Editor in Chief. AIMS Environmental Science, 2017, 4(2): 287-288. doi: 10.3934/environsci.2017.2.287
[10]	Rukhsana Kokkadan, Resha Neznin, Praseeja Cheruparambath, Jerisa Cabilao, Salma Albouchi . A Study of Infaunal Abundance, Diversity and Distribution in Chettuva Mangrove, Kerala, India. AIMS Environmental Science, 2023, 10(1): 82-92. doi: 10.3934/environsci.2023005

Abstract

Dear Editorial Board Members and Readers:

It is my pleasure to share with you the year-end report for AIMS Environmental Science for 2021. The journal continues to improve its quality as indicated by steady increases in the number of manuscripts received and the number of articles published over the past three years. We have received 202 submissions with 40 published online. The top read article received more than 15980 downloads.

I would like to thank all the board members for serving on the Editorial Board and their dedication and contribution to the journal. The goal for 2022 is to solicit more papers and increase paper citations. We will try our best to reduce the processing time and supply with a better experience for publication. To recognize the contribution of the Editorial Board members and authors during the years, we will offer that (1) for authors invited the article processing charge (APC) is automatically waived and (2) each editorial board member is entitled for some waivers. I am looking forward to continuing working with you to make the AIMS Environmental Science a sustainable and impactful journal. Please don't hesitate to send me e-mails if you have new ideas and suggestions to help us to achieve this goal.

Yifeng Wang, Ph.D.

Editor in Chief, AIMS Environmental Science

References

[1]	J. M. Keynes, The General Theory of Interest, Employment and Money, (2018), 152–180. https://doi.org/10.1007/978-3-319-70344-2
[2]	Z. Y. Xiao, L. Lin, Financialization, life cycle and persistent innovation: an empirical research based on the industrial difference, J. Finance Econ., 45 (2019), 43–57. https://doi.org/10.16538/j.cnki.jfe.2019.08.003 doi: 10.16538/j.cnki.jfe.2019.08.003
[3]	H. B. Huang, S. P. Zhai, J. N. Chen, Corporate life cycle, financing methods and financing constraints—based on the moderating effect research of investor sentiment, J. Financ. Res., 07 (2016), 96–112.
[4]	M. Yan, The modern corporation and private property, in Encyclopedia of Sustainable Management, Springer, Cham, 2020. https://doi.org/10.1007/978-3-030-02006-4_428-1
[5]	Z. Li, F. Zou, B. Mo, Does mandatory CSR disclosure affect enterprise total factor productivity, Economic Res.-Ekonomska Istraživanja, 35 (2022), 4902–4921. https://doi.org/10.1080/1331677X.2021.2019596 doi: 10.1080/1331677X.2021.2019596
[6]	Y. Liu, P. Failler, L. M. Chen, Can mandatory disclosure policies promote corporate environmental responsibility?—Quasi-natural experimental research on China, Int. J. Environ. Res. Public Health, 18 (2021), 6033. https://doi.org/10.3390/ijerph18116033 doi: 10.3390/ijerph18116033
[7]	Y. Liu, P. Failler, Y. Ding, Enterprise financialization and technological innovation: Mechanism and heterogeneity, PLoS ONE, 17 (2022), e0275461. https://doi.org/10.1371/journal.pone.0275461 doi: 10.1371/journal.pone.0275461
[8]	Y. Z. Wang, M. Song, Macroeconomic uncertainty, demand for financing and corporate investment, Econ. Res. J., 49 (2014), 4–17.
[9]	Z. Li, J. Zhong, Impact of economic policy uncertainty shocks on China's financial conditions, Financ. Res. Lett., 35 (2020), 101303. https://doi.org/10.1016/j.frl.2019.101303 doi: 10.1016/j.frl.2019.101303
[10]	Z. Li, G. Liao, K. Albitar, Does corporate environmental responsibility engagement affect firm value? The mediating role of corporate innovation, Bus. Strategy Environ., 29 (2020), 1045–1055. https://doi.org/10.1002/bse.2416 doi: 10.1002/bse.2416
[11]	R. U. Khan, H. Arif, N. E. Sahar, A. Ali, M. A. Abbasi, The role of financial resources in SMEs' financial and environmental performance; the mediating role of green innovation, Green Finance, 4 (2022), 36–53. https://doi.org/10.3934/GF.2022002 doi: 10.3934/GF.2022002
[12]	Z. Yang, F. Liu, H. J. Wang, Are corporate financial assets allocated for capital reserve or speculative purpose, Manage. Rev., 29 (2017), 13–25+34. https://doi.org/10.14120/j.cnki.cn11-5057/f.2017.02.002 doi: 10.14120/j.cnki.cn11-5057/f.2017.02.002
[13]	Z. H. Huang, X. Li, S. L. Chen, Financial speculation or capital investment? Evidence from relationship between corporate financialization and green technology innovation, Front. Environ. Sci-Switz., 8 (2021). https://doi.org/10.3389/FENVS.2020.614101 doi: 10.3389/FENVS.2020.614101
[14]	R. Duchin, T. Gilbert, J. Harford, C. Hrdlicka, Precautionary savings with risky assets: When cash is not cash, J. Finance, 72 (2017), 793–852. https://doi.org/10.1111/jofi.12490 doi: 10.1111/jofi.12490
[15]	Y. M. Hu, X. T. Wang, J. Zhang, The Motivation for financial asset allocation: Reservoir or substitution?—Evidence from Chinese listed companies, Econ. Res. J., 52 (2017), 181–194.
[16]	W. F. Xu, Q. S. Ruan, G. D. Wang, External environmental risk perception of private entrepreneurs and innovation investment of enterprises, Sci. Res. Manage., 42 (2021), 160–171. https://doi.org/10.19571/j.cnki.1000-2995.2021.03.016 doi: 10.19571/j.cnki.1000-2995.2021.03.016
[17]	O. Sukharev, E. Voronchikhina, Financial and non-financial investments: Comparative econometric analysis of the impact on economic dynamics, Quant. Finance Econ., 4 (2020), 382–411. https://doi.org/10.3934/qfe.2020018 doi: 10.3934/qfe.2020018
[18]	M. X. Wang, L. Li, H. Y. Lan, The measurement and analysis of technological innovation diffusion in China's manufacturing industry, Natl. Account. Rev., 3 (2021), 452–471. https://doi.org/10.3934/NAR.2021024 doi: 10.3934/NAR.2021024
[19]	M. Q. Sheng, S. Wang, Y. P. Shang, Financial assets allocation and entity enterprises' total factor productivity: "integration of industrial—finance capital" or "removing reality to virtual", Finance Trade Res., 10 (2018), 87–97. https://doi.org/10.19337/j.cnki.34-1093/f.2018.10.008 doi: 10.19337/j.cnki.34-1093/f.2018.10.008
[20]	Z. Liu, X. Li, X. Peng, Green or nongreen innovation? Different strategic preferences among subsidized enterprises with different ownership types, J. Clean Prod., 245 (2020), 118786. https://doi.org/10.1016/j.jclepro.2019.118786 doi: 10.1016/j.jclepro.2019.118786
[21]	L. W. Cheng, X. Y. Dai, The distribution of R&D investment and influence factors of R&D intensity based on 300,000 industrial enterprises' panel data in China, China Soft Sci., 8 (2012), 152–165.
[22]	Y. Liu, C. Ma, Z. Huang, Can the digital economy improve green total factor productivity? An empirical study based on Chinese urban data, Math. Biosci. Eng., 20 (2023), 6866–6893. https://doi.org/10.3934/mbe.2023296 doi: 10.3934/mbe.2023296
[23]	H. F. Gu, H. H. Zhang, Enterprise financialization, financing constraints and corporate innovation mediating effect of monetary policy, Mod. Econ. Sci., 42 (2020), 74–89.
[24]	G. Desalegn, A. Tangl, Forecasting green financial innovation and its implications for financial performance in Ethiopian Financial Institutions: Evidence from ARIMA and ARDL model, Natl. Account. Rev., 4 (2022), 95–111. https://doi.org/10.3934/NAR.2022006 doi: 10.3934/NAR.2022006
[25]	P. Z. Liu, Y. M. Zhao, J. N. Zhu, C. Y. Yang. Technological industry agglomeration, green innovation efficiency, and development quality of city cluster, Green Finance, 4 (2022), 411–435. https://doi.org/10.3934/GF.2022020 doi: 10.3934/GF.2022020
[26]	Z. Li, C. Yang, Z. Huang, How does the fintech sector react to signals from central bank digital currencies? Finance Res. Lett., 50 (2022), 103308. https://doi.org/10.1016/j.frl.2022.103308 doi: 10.1016/j.frl.2022.103308
[27]	J. Atta-Mensah, Commodity-linked bonds as an innovative financing instrument for African countries to build back better, Quant. Finance Econ., 5 (2021), 516–541. https://doi.org/10.3934/QFE.2021023 doi: 10.3934/QFE.2021023
[28]	T. I. Palley, Financialization: What It Is and Why It Matters, Levy Economics Institute Working Paper No. 525. http://dx.doi.org/10.2139/ssrn.1077923
[29]	Y. Su, Z. Li, C. Yang, Spatial interaction spillover effects between digital financial technology and urban ecological efficiency in China: An empirical study based on spatial simultaneous equations, Int. J. Environ. Res. Public Health, 18 (2021), 8535. https://doi.org/10.3390/IJERPH18168535 doi: 10.3390/IJERPH18168535
[30]	Z. Li, H. Chen, B. Mo, Can digital finance promote urban innovation? Evidence from China, Borsa Istanbul Rev., 11 (2022). https://doi.org/10.1016/j.bir.2022.10.006 doi: 10.1016/j.bir.2022.10.006
[31]	Y. Liu, P. Failler, Z. Liu, Impact of environmental regulations on energy efficiency: A case study of China's air pollution prevention and control action plan, Sustainability, 14 (2022), 3168. https://doi.org/10.3390/su14063168 doi: 10.3390/su14063168
[32]	Z. Huang, H. Dong, S. Jia, Equilibrium pricing for carbon emission in response to the target of carbon emission peaking, Energy Econ. 112 (2022), 106160. https://doi.org/10.1016/j.eneco.2022.106160 doi: 10.1016/j.eneco.2022.106160
[33]	F. Demir, Financial liberalization, private investment and portfolio choice: Financialization of real sectors in emerging markets, J. Dev. Econ., 88 (2009), 314–324. https://doi.org/10.1016/j.jdeveco.2008.04.002 doi: 10.1016/j.jdeveco.2008.04.002
[34]	J. Song, Y. Lu, U-shape relationship between non-currency financial assets and operating profit: Evidence from financialization of Chinese listed non-financial corporates, J. Financ. Res., 6 (2015), 111–127.
[35]	G. C. Liu, Financial asset allocations and the firms' R&D activity in China: Crowding-out or crowding-in, Stat. Res., 34 (2017), 49–61. https://doi.org/10.19343/j.cnki.11-1302/c.2017.07.005 doi: 10.19343/j.cnki.11-1302/c.2017.07.005
[36]	H. J. Wang, Y. Q. Cao, Q. Yang, Z. Yang, Does the financialization of non-financial enterprises promote or inhibit corporate innovation, Nankai Bus. Rev., 20 (2017), 155–166. https://doi.org/10.3969/j.issn.1008-3448.2017.01.014 doi: 10.3969/j.issn.1008-3448.2017.01.014
[37]	M. Xu, K. Albitar, Z. Li, Does corporate financialization affect EVA? Early evidence from China, Green Finance, 2 (2020), 392–408. https://doi.org/10.3934/GF.2020021 doi: 10.3934/GF.2020021
[38]	M. Hong, B. Drakeford, K. Zhang, The impact of mandatory CSR disclosure on green innovation: evidence from China, Green Finance, 2 (2020), 302–322. https://doi.org/10.3934/GF.2020017 doi: 10.3934/GF.2020017
[39]	Z. Li, F. Zou, B. Mo, Does mandatory CSR disclosure affect enterprise total factor productivity, Econ. Res-Ekonomska Istraživanja, 35 (2021), 1–20. https://doi.org/10.1080/1331677X.2021.2019596 doi: 10.1080/1331677X.2021.2019596
[40]	A. F. Burns, W. C. Mitchell, Measuring Business Cycles, NBER, 1946.
[41]	F. Q. Shi, Empirical analysis of China's business cycle, Stat. Res., 7 (2000), 59–62.
[42]	Y. Liu, Z. Li, M. Xu, The influential factors of financial cycle spillover: Evidence from China, Emerging Mark. Finance Trade, 56 (2020), 1336–1350. https://doi.org/10.1080/1540496x.2019.1658076 doi: 10.1080/1540496x.2019.1658076
[43]	Z. Du, Y. Li, G. Lv, Evaluating the nonlinear relationship between nonfinancial corporate sector leverage and financial stability in the post crisis era, AIMS Math., 7 (2022), 20178–20198. https://10.3934/math.20221104 doi: 10.3934/math.20221104
[44]	B. Bernanke, M. Gertler, Agency costs, net worth, and business fluctuations, Am. Econ. Rev., 79 (1989), 14–31.
[45]	T. Li, X. Li, G. Liao, Business cycles and energy intensity. Evidence from emerging economies, Borsa Istanbul Rev., 22 (2022), 560–570. https://doi.org/10.1016/j.bir.2021.07.005 doi: 10.1016/j.bir.2021.07.005
[46]	X. Chang, The impact of corporate tax outcomes on forced CEO turnover, Natl. Account. Rev., 4 (2022), 218–236. https://10.3934/NAR.2022013 doi: 10.3934/NAR.2022013
[47]	J. A. Schumpeter, The Theory of Economic Development, Translated from the German by REDVERS OPIE, Cambridge, Harvard University Press, 1934.
[48]	L. Chen, Z. Du, Z. Hu, Impact of economic policy uncertainty on exchange rate volatility of China, Finance Res. Lett., 32 (2020), 101266. https://10.1016/j.frl.2019.08.014 doi: 10.1016/j.frl.2019.08.014
[49]	G. Liao, P. Hou, X. Shen, K. Albitar, The impact of economic policy uncertainty on stock returns: The role of corporate environmental responsibility engagement, Int. J. Finance Econ., 26 (2020), 4386–4389. https://doi.org/10.1002/ijfe.2020 doi: 10.1002/ijfe.2020
[50]	Y. Liu, L. Chen, L. Lv, P. Failler. The impact of population aging on economic growth: a case study on China, AIMS Math, 8 (2023), 10468–10485. https://doi.org/10.3934/math.2023531 doi: 10.3934/math.2023531
[51]	C. W. J. Granger, T. Teräsvirta, Modelling Non-Linear Economic Relationships, OUP Catalogue, Oxford University Press, 1993. https://doi.org/10.1002/jae.3950090412
[52]	A. Gonzalez, T. Teräsvirta, D. Dijk, Y. Yang, Panel smooth transition regression models, No. 604, SSE/EFI Working Paper Series in Economics and Finance, Stockholm School of Economics, 2017.

Reader Comments

Your name:*

Email:*
© 2023 the Author(s), licensee AIMS Press. This is an open access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0)