Financialization and Innovation -Empirical Evidence from Chinese Listed Manufacturing Companies
(2021) NEKN02 20211Department of Economics
- Abstract
- The thesis empirically studies the relationship between the trend of financialization and innovation in China. Several years ago, due to the slow-down of Chinese real economy, there appeared two tendencies in business environment: the increasing financial asset allocation of Chinese non-financial companies (named as financialization) and the authority’s will of boosting the real industries, especially manufacturing, mainly through technological innovation. Currently, the worry in Chinese society is that the massive profit-driven allocation of financial assets (or extensive participation in financial activities of NFCs) might to some degrees crowd out the shares of real economy and the industrial innovation plans proposed by Chinese... (More)
- The thesis empirically studies the relationship between the trend of financialization and innovation in China. Several years ago, due to the slow-down of Chinese real economy, there appeared two tendencies in business environment: the increasing financial asset allocation of Chinese non-financial companies (named as financialization) and the authority’s will of boosting the real industries, especially manufacturing, mainly through technological innovation. Currently, the worry in Chinese society is that the massive profit-driven allocation of financial assets (or extensive participation in financial activities of NFCs) might to some degrees crowd out the shares of real economy and the industrial innovation plans proposed by Chinese authority. If there is negative relationship between financialization and innovation, the “crowding-out effect” dominates; however, if there is positive relationship existing, the “reservoir effect” dominates. Hence, the paper empirically researched the link between the allocation of financial assets and innovation for 1683 Chinese listed manufacturing companies in the period from 2011 to 2018, and figured out that there is rather weak relationship between financialization and innovation, although there seems to be some weak tendency that companies with good operating performance might generate reservoir effect for innovation, and financialization is more likely to impact the annual changes in innovation. Moreover, government subsidy does not play a role in the relationship between financialization and innovation. Therefore, it is possible that the concern of the crowding-out effect (from financialization to innovation) might be exaggerated, shown with the results generated in the thesis. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9053553
- author
- Lai, Yijun LU
- supervisor
- organization
- course
- NEKN02 20211
- year
- 2021
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- Financialization, Innovation, Operating Performance, Government Subsidy
- language
- English
- id
- 9053553
- date added to LUP
- 2021-10-26 08:16:49
- date last changed
- 2021-10-26 08:16:49
@misc{9053553,
abstract = {{The thesis empirically studies the relationship between the trend of financialization and innovation in China. Several years ago, due to the slow-down of Chinese real economy, there appeared two tendencies in business environment: the increasing financial asset allocation of Chinese non-financial companies (named as financialization) and the authority’s will of boosting the real industries, especially manufacturing, mainly through technological innovation. Currently, the worry in Chinese society is that the massive profit-driven allocation of financial assets (or extensive participation in financial activities of NFCs) might to some degrees crowd out the shares of real economy and the industrial innovation plans proposed by Chinese authority. If there is negative relationship between financialization and innovation, the “crowding-out effect” dominates; however, if there is positive relationship existing, the “reservoir effect” dominates. Hence, the paper empirically researched the link between the allocation of financial assets and innovation for 1683 Chinese listed manufacturing companies in the period from 2011 to 2018, and figured out that there is rather weak relationship between financialization and innovation, although there seems to be some weak tendency that companies with good operating performance might generate reservoir effect for innovation, and financialization is more likely to impact the annual changes in innovation. Moreover, government subsidy does not play a role in the relationship between financialization and innovation. Therefore, it is possible that the concern of the crowding-out effect (from financialization to innovation) might be exaggerated, shown with the results generated in the thesis.}},
author = {{Lai, Yijun}},
language = {{eng}},
note = {{Student Paper}},
title = {{Financialization and Innovation -Empirical Evidence from Chinese Listed Manufacturing Companies}},
year = {{2021}},
}