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Financialization And Stagnant Capital Accumulation In China

Author

Listed:
  • Guanchun Liu

    (School of Public Economics & Administration, Shanghai University of Finance & Economics, Shanghai, P.R. China)

  • Chien-Chiang Lee

    (Corresponding author Department of Finance, National Sun Yat-sen University, Kaohsiung, Taiwan)

Abstract

Using a semi-annual data of listed non-financial corporations from 2007 to 2015, this paper investigates the effect of financialization on capital accumulation in China. The results show that increased financial profit crowds out real investment, especially for small and private firms. Furthermore, the effect of financialization reverts to be positive in the long-run and its cumulative effect manifests a “U-type” pattern

Suggested Citation

  • Guanchun Liu & Chien-Chiang Lee, 2018. "Financialization And Stagnant Capital Accumulation In China," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 21(1), pages 23-32, July.
    • Handle: RePEc:idn:journl:v:21:y:2018:i:1:p:23-32
    DOI: https://doi.org/10.21098/bemp.v21i1.941
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    References listed on IDEAS

    as
    1. Thomas Chaney & David Sraer & David Thesmar, 2012. "The Collateral Channel: How Real Estate Shocks Affect Corporate Investment," American Economic Review, American Economic Association, vol. 102(6), pages 2381-2409, October.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Financialization; Capital accumulation; Polynomial inverse lag; China;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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