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Delisting regulation and corporate financialization: Evidence from China

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  • Shi, Wenxiang
  • Fang, Peijie

Abstract

We investigate the impact of the implementation of new delisting regulations in China in 2020 on corporate financialization, utilizing data of non-financial listed companies in Chinese A-share market from 2018 to 2022. We find a reduction in corporate financialization after the new delisting regulation, and the decline can be attributed partly to a more constrained free cash flow and reduced managerial myopia. The decrease in financialization is more pronounced among non-SOEs, companies with management shareholding, concentrated ownership structure, and less external attention. After the new delisting regulation, the operational performance of companies’ core business is also improved, and more long-term assets are allocated, indicating a positive effect of the new delisting regulation on real economy.

Suggested Citation

  • Shi, Wenxiang & Fang, Peijie, 2023. "Delisting regulation and corporate financialization: Evidence from China," Finance Research Letters, Elsevier, vol. 58(PD).
    • Handle: RePEc:eee:finlet:v:58:y:2023:i:pd:s1544612323010577
    DOI: 10.1016/j.frl.2023.104685
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