The Impact of Ownership Concentration on Corporate Financialization: The Mediating Effect of Financing Constraints

Abstract

This article selects small and medium-sized listed companies (with stock codes starting with 002) as the research subjects, constructing a panel dataset spanning from 2017 to 2021, resulting in a total of 4324 observations. Through an extensive review and analysis of existing literature and relevant theories, it comprehensively explores the effects of equity concentration on corporate financialization and whether these effects differ in state-owned enterprises. Additionally, it investigates the moderating effects of financing constraints as a variable. After empirical analysis and robustness tests, the following conclusions are drawn: Equity concentration has a significantly negative impact on corporate financialization. Moreover, equity concentration exacerbates financing constraints, which, in turn, suppress corporate financialization. Furthermore, compared to state-owned enterprises, equity concentration has a more pronounced inhibitory effect on corporate financialization in non-state-owned enterprises. In the context of this study, state-owned enterprises in China are those in which ownership or control belongs to the state. The research on the impact of corporate financialization in this article can provide a theoretical basis for government and financial regulatory agencies to formulate financial policies in practical terms.