Abstract
This paper examines whether the relationship between corporate financialization and fixed investment rate is heterogeneous among China's listed non-financial enterprises. Using data from 2007 to 2016, we find that there is a negative relationship between corporate financialization and fixed investment rate. This result is consistent with the crowding out view that corporate investment in financial assets crowd out fixed investment. The relationship is moderated negatively (i.e., weakened) by monetary policy. We also find that this negative (moderating) relationship is more (less) pronounced in state-owned enterprises than in non-state-owned enterprises.
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