Study on the Motivation of Nonlinear Trajectory of Corporate Financialization and the Impact of Financial Performance

Abstract

With the continuous changes in the global market environment and the intensification of trade friction between China and the United States, the downward pressure on China's real economy has increased. Entity enterprises have been involved in the financial and real estate and other virtual economy, in order to obtain high profits, the entity enterprise "de-realization to virtual" phenomenon is becoming more and more serious. In recent years, the state has introduced a series of policies to guide manufacturing enterprises to "return to the real", of which "deleveraging" in the supply-side structural reform has become an important means to regulate the disconnection between the real and the virtual economy. How to guide and promote the manufacturing enterprises to "return to reality" is the key to promote the high-quality development of China's economy, but how the impact needs to be studied in depth. Taking Huamao shares as a case study, this study selects 15 key financial indicators between 2010 and 2022, and applies the entropy method to quantitatively analyze the differential impact on financial performance of the company's financialization behavior between 2010 and 2019 and its de-financialization process from 2020 to the present. By deeply exploring the non-linear development trajectory of financialization and its specific impact on the financial performance of the company, this paper reveals that Huamao's financialization behavior, while promoting investment returns, has generated investment substitution effects and in turn has generated obvious crowding-out effects on the company's main business, thus weakening the profitability of the company. In view of this, it puts forward relevant policy suggestions for the financialization of manufacturing enterprises, which helps to guide industrial capital to return to the main business and accelerate the upgrading and transformation of manufacturing industry under the background of revitalization of the real economy vigorously advocated by the state and has certain guiding significance, and emphasizes the importance of returning to the manufacturing industry and the necessity of returning to the industry as the core engine for promoting the long-term and stable growth of China's economy in order to provide a reference path for the development of other financialized real enterprises. It emphasizes the importance and necessity of the return of the manufacturing industry as the core engine for promoting the long-term stable growth of China's economy, with a view to providing a reference path for the development of other financialized real enterprises.