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Financial regulation, corporate financialization and industrial investment

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  • Ai, Ling

Abstract

This paper systematically examines the impact of local financial regulation on industrial investment and its underlying mechanisms, utilizing data from Shanghai and Shenzhen A-share non-financial listed companies spanning from 2011 to 2023, against the backdrop of policies such as the "New Asset Management Regulations." The findings reveal that: firstly, an increase in financial regulatory intensity significantly promotes corporate industrial investment; secondly, corporate financialization partially mediates the relationship between regulation and investment, with regulation guiding capital "from virtual to real" through dual pathways of "direct regulation + indirect suppression of financialization"; thirdly, the regulatory effects exhibit significant regional heterogeneity, with strengthened regulation having a more pronounced promotional effect on industrial investment in the western regions where financial development lags behind.

Suggested Citation

  • Ai, Ling, 2026. "Financial regulation, corporate financialization and industrial investment," Finance Research Letters, Elsevier, vol. 87(C).
    • Handle: RePEc:eee:finlet:v:87:y:2026:i:c:s1544612325023086
    DOI: 10.1016/j.frl.2025.109059
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