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Does foreign demand affect corporate financialization? Some evidence from China

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  • Tudi, Tayier
  • Wu, Ji
  • Chen, Minghua
  • Jeon, Bang Nam

Abstract

We investigate whether foreign demand influences corporate financialization using data from over 1700 Chinese non-financial firms during 2007–2016. Our findings consistently reveal a negative relationship, indicating that firms increase their financial asset holdings and more actively engage in financial transactions when foreign demand declines, and vice versa when foreign demand rises. Foreign demand shapes firms' financialization by influencing their returns from real investments and financial constraints. Furthermore, we explore heterogeneous impacts of foreign demand across different financial assets, industries, and indebtedness levels in firms.

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  • Tudi, Tayier & Wu, Ji & Chen, Minghua & Jeon, Bang Nam, 2025. "Does foreign demand affect corporate financialization? Some evidence from China," Emerging Markets Review, Elsevier, vol. 65(C).
    • Handle: RePEc:eee:ememar:v:65:y:2025:i:c:s1566014124001274
    DOI: 10.1016/j.ememar.2024.101232
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    More about this item

    Keywords

    Corporate financialization; Foreign demand; China;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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