Xiaochen JIANG,Jiayi HAN

• 1:Department of Economics
• 2:SOAS University of London
• 3:Legal Information Center
• 4:Peking University

摘要(Abstract)：

The impressive development of China's economy over the past few decades has enabled non-financial firms to adopt financial investment in exchange for enhanced financing behavior and short-term profit(shareholder value) maximization,while the persistence of fixed investment leading to dramatic capital accumulation has spurred the nation's rapid economic growth.The existing literature has extensive discussions on the crowd-out effect of financial activities on non-financial firms' fixed investment but overlooks to what extent and under what forces financial activities potentially benefit real investment.This paper investigates whether profits from financial activities have an inverted U-shape relationship with firms' fixed investment.In particular,we aim to identify if the benefit of financial profit on fixed investment is through the financial constraint channel and/or ownership structure channel for Chinese-listed firms from 2003 to 2018.We present robust evidence to support the inverted U-shape relationship between financial profit and fixed investment for the whole sample of firms as well as the split samples of firms(SOEs and non-SOEs).Moreover,among all channels including cash flow,debt financing,managerial shareholding,ownership concentration,and state ownership,this research documents that financial profit mainly benefits firms by reducing debt burden.Firms with concentrated ownership and strong state shareholding are also more likely to crowd-out real investment or potentially alleviate overinvestment.Nevertheless,non-SOEs are more prone to benefit from financial profits by reducing the debt overhang problem than SOEs,whereas ownership concentration for nonSOEs increments the crowd-out effect.

关键词(KeyWords)：

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作者(Author): Xiaochen JIANG,Jiayi HAN

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