TITLE:
The Impact of Monetary Policy Uncertainty on Corporate Financialization—Evidence from China
AUTHORS:
Wenzhen Yan
KEYWORDS:
Monetary Policy Uncertainty, Corporate Financialization, Financial Asset Return, Debt Financing Cost, Chinese Listed Companies
JOURNAL NAME:
Open Journal of Business and Management,
Vol.11 No.2,
March
14,
2023
ABSTRACT: This paper conducts an empirical analysis of the impact of monetary policy uncertainty on the financialization of China’s
non-financial listed companies from 2008 to 2020. Utilizing a large dataset,
the findings indicate that monetary policy uncertainty has a significant
negative impact on the financialization behavior of listed companies. This
effect is particularly pronounced in non-state enterprises, firms led by
executives with financial backgrounds, those holding dual positions, and those
located in areas with high levels of bank competition. The results further
suggest that the mechanism underlying this effect is due to a reduction in the
returns on firms’ financial assets and an increase in their debt financing
costs. The empirical results stay robust to the use of the instrumental
variables approach and the generalized method of moments (GMM) estimation to
address the potential endogeneity problem.