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A U-shaped relationship between real financialization and financial risk: Evidence from a single threshold model

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  • Yan, Xiang
  • Wang, Xuefang
  • Liu, Sheng

Abstract

Financialization plays an important role in promoting economic development. This paper discusses the motivations and impacts of enterprises' financialization, and introduces the current state of China's economic development and the current state of China's business economy to deepen the understanding of economic trends. It also examines the impact of enterprises' financialization on financial risk using a threshold model. The results show a U-shaped relationship between entity enterprises' financialization and financial risk: financialization helps reduce financial risk when the level of financialization reaches 0.45%.

Suggested Citation

  • Yan, Xiang & Wang, Xuefang & Liu, Sheng, 2023. "A U-shaped relationship between real financialization and financial risk: Evidence from a single threshold model," Finance Research Letters, Elsevier, vol. 56(C).
    • Handle: RePEc:eee:finlet:v:56:y:2023:i:c:s1544612323003896
    DOI: 10.1016/j.frl.2023.104017
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    References listed on IDEAS

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    Cited by:

    1. Zheng Zhiyong & Xu Buyun & Xu Yongbin, 2024. "Family business financialization and green innovation in China from 2008 to 2023," International Entrepreneurship and Management Journal, Springer, vol. 20(4), pages 2453-2479, December.
    2. Gao, Ting & Wang, Huaiming & Du, Dongying, 2024. "The interdependence structure of cryptocurrencies and Chinese financial assets," Finance Research Letters, Elsevier, vol. 62(PA).
    3. Li, Hanteng & Qin, Yun, 2024. "Land financialization and regional innovation dynamics: Evidence from China," Finance Research Letters, Elsevier, vol. 64(C).
    4. Shi, Wenxiang & Fang, Peijie, 2023. "Delisting regulation and corporate financialization: Evidence from China," Finance Research Letters, Elsevier, vol. 58(PD).

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