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The impact of common institutional ownership on financialization in non-financial enterprise: Exacerbation or inhibition?

Author

Listed:
  • Ning, Zihao
  • Xu, Zhibo
  • Zheng, Pengju

Abstract

This paper proposes that common institutional ownership positively affects the non-financial firm financialization by using data from Chinese listed firms from 2007 to 2022. The findings reveal that information asymmetry and financial constraints emerge as significant transmission mechanisms between common institutional ownership and firm financialization. Moreover, this positive relationship is more pronounced in state-owned enterprises, firms audited by non-Big 4 auditors, and those facing weaker market competition.

Suggested Citation

  • Ning, Zihao & Xu, Zhibo & Zheng, Pengju, 2024. "The impact of common institutional ownership on financialization in non-financial enterprise: Exacerbation or inhibition?," Finance Research Letters, Elsevier, vol. 69(PB).
    • Handle: RePEc:eee:finlet:v:69:y:2024:i:pb:s1544612324012261
    DOI: 10.1016/j.frl.2024.106197
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    More about this item

    Keywords

    Common institutional ownership; Enterprise financialization; Information asymmetry; Financing constraints;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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