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Non-Financial Enterprise Financialization, Product Market Competition, and Total Factor Productivity of Enterprises

Author

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  • Long Miao
  • Yue Zhuo
  • Haojun Wang
  • Bei Lyu

Abstract

At present, two big challenges have struck China’s economic development: economic containment “from the real to the virtual†and accomplishment in the goal of high-quality economic development. Taking China’s A-share public manufacturing enterprises from 2007 to 2020 as samples, this paper empirically analyzes the relationships among product market competition, non-financial enterprise financialization, and total factor productivity of enterprises. It is found that non-financial enterprise financialization significantly lowers down the total factor productivity of enterprises, that is, the total factor productivity of enterprises will drop by 1.7% as the non-financial enterprise financialization rises by 1 SD every time. After external regulation effects of product market competition are further taken into account, the furious product market competition, on the whole, mitigates the negative influences of non-financial enterprise financialization on total factor productivity of enterprises by strengthening the role of non-financial enterprise financialization as a “reservoir†and abating the “crowding-out†effect. Therefore, competition promotion policies combined with funds moving “from the virtual to the real†could more effectively elevate the enterprise productivity.

Suggested Citation

  • Long Miao & Yue Zhuo & Haojun Wang & Bei Lyu, 2022. "Non-Financial Enterprise Financialization, Product Market Competition, and Total Factor Productivity of Enterprises," SAGE Open, , vol. 12(2), pages 21582440221, May.
    • Handle: RePEc:sae:sagope:v:12:y:2022:i:2:p:21582440221089956
    DOI: 10.1177/21582440221089956
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    1. Guoen Xia & Zenghui Yu & Xuwu Peng, 2023. "How Does Enterprise Digital Transformation Affect Total Factor Productivity? Based on the Information Intermediary Role of Analysts’ Attention," Sustainability, MDPI, vol. 15(11), pages 1-22, May.

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