Does financialization of non-financial corporations promote the persistence of innovation: evidence from A-share listed manufacturing corporations in China

Xie, Zhengjuan; Du, Jun; Wu, Yongchao

doi:10.1007/s40821-021-00193-x

Cited by 24 publications

(17 citation statements)

References 59 publications

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“…It is because the motivation for a firm to engage in financialization is to enhance its operating performance. We define OP as operating net income divided by the sum of fixed assets and inventories (Xie and Kuang, 2020). For RISK , we follow Zhong et al (2016) to define it as: RISK = 0.517 – 0.460 total liabilities/total assets + 9.320 net profit/total assets + 0.388 (current asset minus current liabilities)/total assets + 1.158 retained earnings/total assets.…”

Section: Resultsmentioning

confidence: 99%

Pension insurance contributions and corporate financialization: evidence from China

Xia

Mao

et al. 2022

NBRI

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Purpose This paper aims to investigate the impact of a firm’s pension insurance contributions (PIC) on its financialization (investment in risky assets) using a sample of Chinese firms. Design/methodology/approach The authors use a multiple regression model to conduct the analysis. Findings The findings suggest that a firm’s PIC increases its financialization. Additional analysis suggests that firms with higher PIC are more likely to have lower operating profit and higher financial risk. In addition, the impact of PIC on financialization is more salient when a firm faces high industry competitiveness, holds more cash, has high labor costs and labor intensity or is non-state owned. Practical implications The paper adds to the growing literature on the effect of social insurance on corporate policies. The findings complement those related to the relationship between defined contributions and defined benefits retirement plans and corporate policies. Social implications The study contributes to the debate on the merits of financialization. The literature is mixed on the pros and cons of financialization. The results suggest that financialization has an adverse effect on a firm’s performance and risk in the lens of increased PIC. Originality/value China has seen a trend of financialization arising from the rapid economic development in the past decade. Moreover, the PIC premiums in China are not trivial. Thus, the significant cost of PIC and the financialization trend suggest that the answer to the research question is timely and meaningful.

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Section: Resultsmentioning

confidence: 99%

Pension insurance contributions and corporate financialization: evidence from China

Xia

Mao

et al. 2022

NBRI

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“…Interpreted variable: Enterprise financialization. Referring to the practices of Xie et al [ 24 ], Liu & Wei [ 3 ], this paper uses the proportion of financial assets in total assets to measure the level of enterprise financialization. Financial assets include monetary capital, net held to maturity investment, trading financial assets, derivative financial assets, net available for sale financial assets, net long-term equity investment, net dividend receivable and net interest receivable.…”

Section: Methodsmentioning

confidence: 99%

Supply chain concentration and enterprise financialization: Evidence from listed companies in China’s manufacturing industry

Zuo

2023

PLoS ONE

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Enterprise financialization will block the equipment update and technological innovation of enterprises by crowding out the main business funds. The risks and benefits of supply chain concentration will affect the enterprise financialization. This paper selects the panel data of A-share listed companies in China from 2009 to 2021, and uses fixed effect regression to analyze the impact of supply chain concentration on enterprise financialization. The conclusions show: both suppliers and customers concentration significantly promote the financialization of enterprises, and this conclusion is still valid after a series of tests; This kind of financialization effect is heterogeneous in four aspects: the nature of property rights, the scale of enterprises, the intensity of industrial competition and the level of economic development in the region where the enterprises are located; the mechanism analysis show that customer concentration can affect enterprise financialization through upstream commercial credit, but supplier concentration cannot affect enterprise financialization through downstream commercial credit.

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“…Peters (2009) used the probability of maintaining the innovation state to measure the degree of sustainable innovation. Xie et al (2022) thought FSI can be defined as the comparison between current innovation and previous innovation. In addition, Ganter and Hecker (2013) explained how innovation persistence unfolds.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

“…In addition, Ganter and Hecker (2013) explained how innovation persistence unfolds. In terms of the influencing factors, scholars have analyzed the impact of different factors on FSI (Antonelli et al , 2013), such as corporate tensions (Román et al , 2021), financialization of nonfinancial corporations (Xie et al , 2022), life cycle, competitive strategy (Haiyan et al , 2021), the kind of public support firms receive and the type of business strategy they follow (Antonioli and Montresor, 2021) and so on. Although they have done some valuable research, they knew little about the relationship between KD, ego-network structures and FSI.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

“…Throughout the existing literature, scholars have conducted some valuable research on FSI, KD and ego-network structures, but there are still some research gaps that need to be filled. On the one hand, they knew little about the relationship between KD and FSI (Antonioli and Montresor, 2021; Xie et al , 2022; Yao et al , 2022). On the other hand, they not only ignored the relationship between ego-network structures (ED and HB) and FSI based on the ego-network perspective but also ignored the influence of ego-network structures (ED and HB) on the relationship between KD and FSI (McFadyen et al , 2009; Liang et al , 2021; Korpas et al , 2021).…”

Section: Introductionmentioning

confidence: 99%

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How do knowledge diversity and ego-network structures affect firms' sustainable innovation: evidence from alliance innovation networks of China's new energy industries

Zhao

et al. 2022

JKM

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Purpose Facing the global public health emergency (GPHE), the conflict of cultural differences and the imbalance of vital resources such as knowledge among different organizations are becoming more severe, which affects the enthusiasm and sustainability of firms' innovation heavily. It is an urgent problem to be solved for firms how to make use of internal knowledge and external power to help firms' sustainable innovation (FSI). Thus, the purpose of this study is to deeply analyze how firms' internal knowledge diversity (KD) and external ego-network structures [ego-network density (ED) and honest brokers (HB)] affect FSI, as well as how the ego-network structures (ED and HB) moderate the relationship between KD and FSI based on the perspective of the ego network. Design/methodology/approach Based on the data of the alliance innovation networks of China's new energy industries in 2009–2019, this study uses the social network analysis method and negative binomial regression model to explore the effect of KD and ego-network structures (ED and HB) on FSI, as well as the moderating effects of ego-network structures (ED and HB) on the relationship between KD and FSI based on the perspective of ego network. Findings This study finds that KD, ED and HB can boost FSI. Moreover, ED plays a negative moderating role in the relationship between KD and FSI. However, the negative moderating effect of HB on the relationship between KD and FSI is not significant. Research limitations/implications This study presents fresh empirical evidence and new insights for firms on how to make full use of firms' internal KD and external ego-network structures to facilitate FSI. Originality/value First, this study not only enriches the research on the consequences of KD but also expands our understanding of the knowledge-based view to some extent. Second, this study not only enriches the motivation research of the FSI based on the perspective of ego-network in the context of the GPHE but also expands the application scope of social network theory and sustainable innovation' theory in part. Third, this paper is a new attempt to apply social network theory and knowledge-based view at the same time.

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Does financialization of non-financial corporations promote the persistence of innovation: evidence from A-share listed manufacturing corporations in China

Cited by 24 publications

References 59 publications

Pension insurance contributions and corporate financialization: evidence from China

Pension insurance contributions and corporate financialization: evidence from China

Supply chain concentration and enterprise financialization: Evidence from listed companies in China’s manufacturing industry

How do knowledge diversity and ego-network structures affect firms' sustainable innovation: evidence from alliance innovation networks of China's new energy industries

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