Author(s)

Yuwei Zhang

Corresponding Author

Yuwei Zhang

ABSTRACT

In recent years, there has been a trend of transforming from substantial to frictions in China's capital flow, and the problem of corporate financialization has become increasingly prominent. The allocation of financial assets largely depends on corporate performance, which can be influenced by the commitment of corporate social responsibility. Using the panel data of Chinese Shanghai and Shenzhen A-share listed companies from 2011 to 2020, this paper empirically tests the impact of CSR on the level of corporate financialization. The results show that, (1) there is a positive correlation between CSR and the level of corporate financialization. The higher the intensity of CSR is, the higher the level of financialization is. (2) The profitability of enterprises plays a negative regulatory role in the positive correlation between CSR and the level of financialization. (3) The positive impacts of CSR on corporate financialization only exists in enterprises with low financing constraints and enterprises owned by the government. The conclusion of this paper has some implications for enterprises to optimize asset allocation and the government to guide the economy for better following the trend of transforming from substantial to frictions.

KEYWORDS

corporate financialization, corporate social responsibility, profitability, financing constraints, nature of property rights