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Industry-finance collaboration and corporate financialization: Evidence from China

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  • Zhang, Shumin
  • Wang, Shihao
  • Guo, Juanjuan
  • Li, Zhen

Abstract

We regard China’s industry-finance collaboration pilot policy (IFC) as an exogenous shock and employ a difference-in-differences (DID) design to investigate the impact of IFC policy on corporate financialization. Our findings show that the IFC significantly reduces firms’ explicit financial asset investments, accounting for 3.66% of the sample mean and 5.94% of the standard deviation—with no significant effects on shadow banking-related implicit financial assets. Heterogeneity analysis reveals stronger negative effects for private firms and firms with close bank-firm relationships. Mechanism tests indicate the IFC curbs precautionary motives by alleviating financing constraints and reduces profit-seeking incentives through improved corporate governance and core business performance. Overall, we identify and investigate the differential impacts of IFC policy on explicit or implicit financial assets and provide new evidences into the micro-level consequences of IFC and financialization governance.

Suggested Citation

  • Zhang, Shumin & Wang, Shihao & Guo, Juanjuan & Li, Zhen, 2025. "Industry-finance collaboration and corporate financialization: Evidence from China," Finance Research Letters, Elsevier, vol. 86(PD).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pd:s1544612325018872
    DOI: 10.1016/j.frl.2025.108633
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