Financial Asset Allocation Research Articles

Analysis of ABSL Multicap Fund and Textile sector with Innerwear and Hosiery as a Subsector with reference to Lux Industries Ltd

The internship project entitled "Analysis of ABSL Multicap Fund and Textile Sector with Innerwear and Hosiery as a subsector with reference to Lux Industries Ltd." was taken up at Aditya Birla Sun Life Ltd. by Rohan Ganesh Kolhapure. The project would involve assessing the performance, strategies, and market positioning of the ABSL Multicap Fund for the period between June-August 2024. This also included assessing the textile sector dynamics, with special inward titude toward the innerwear hosiery subsector, using Lux Industries Ltd as a case study. The main tasks were related to the assessment of historical performance of ABSL Multicap Fund and its investment strategies, as well as the analysis of sectoral trends influencing the innerwear market. Specific methodologies included quantitative analysis of financial statements, asset allocation, and risk management practices, in addition to strategic frameworks like SWOT, PESTEL, and Porter's Five Forces.

The impact of artificial intelligence on corporate financial asset allocation: Moderating role of organizational dynamic capabilities

The integration of artificial intelligence (AI) into corporate operations has revolutionized financial decision-making processes, yet our understanding of how AI adoption specifically impacts financial asset allocation remains limited. While existing research has explored AI's role in various financial applications, there is a critical gap in empirically examining the relationship between AI adoption and corporate financial asset allocation, particularly in understanding the organizational capabilities that enable firms to effectively leverage AI technologies. This study investigates this relationship using panel data from 25,811 firm-year observations of Chinese A-share listed companies (2008–2022). Through comprehensive regression analyses, we find that AI adoption significantly enhances corporate financial asset allocation efficiency, with this relationship being distinctly moderated by organizational dynamic capabilities. Notably, absorptive capability exhibits the strongest moderating effect, followed by innovative and adaptive capabilities. These findings advance our understanding of AI's role in corporate finance by demonstrating that the success of AI implementation in financial decision-making is contingent upon firms' underlying organizational capabilities. The results provide valuable insights for managers and policymakers in developing targeted strategies to enhance the effectiveness of AI adoption in corporate financial management.

Determinants on the selection of rural households’ financial assets in China: marketization or financial literacy?

Financial literacy is an indispensable factor in household asset allocation, but market-oriented reforms are also an external factor that cannot be ignored. Using data from the 2013 and 2019 China Household Financial Survey (CHFS), this paper investigates whether the individual’s ability or the market system hinders rural households’ participation and asset investment in the financial market. Findings reveal that both marketization and financial literacy positively affect residents’ financial activities, but the roles of the two are not the same. Financial literacy is an essential factor in increasing participation in the financial market. Moreover, marketization and financial literacy significantly affect rural financial asset allocation decisions in four ways: changing risk preference, using the Internet, alleviating liquid constraints and increasing education expenditure on offspring. Besides, households’ financial behaviors exhibit a stronger correlation with improved network infrastructure, robust legal frameworks, favorable business credit environments, higher social media penetration, and enhanced human capital.

Expansion or retrenchment: Corporate investment reactions to external security risks

Intensifying power competition has raised the need to understand how corporations react to international security dynamic challenges. Using data on Chinese A-share listed companies from 2012 to 2022, we developed an index to measure external security risk and empirically study the influence of external security risks on corporate investment behavior. These findings indicate that corporations reduce real investment and increase financial asset allocation when external security risk is high. Meanwhile, corporations tend to expand overseas investments to enhance international diversification and turn toward low-risk regions. The technology and strategic emerging sectors exhibit a higher preference for real investment during periods of high external security risk. Furthermore, entrepreneurs’ family-nation sentiment can inhibit corporate financial investment and promote real investment. This study contributes to understanding how the external security environment shapes corporate investment strategies. It also demonstrates how entrepreneurial spirit can influence corporate investment decisions during periods of high security risk.

How do heavily polluting firms cope with dual environmental regulation? A study from the perspective of financial asset allocation

In view of the current debate on the relationship between environmental regulation and firm financial asset allocation (FFAA), this study explores the compound effect of binding environmental regulation (BER) and public environmental engagement (PEE) on FFAA. The results show that the single constraint of BER cannot effectively inhibit FFAA, and that the governance effect can only be produced in coordination with PEE. In particular, in state-owned enterprises, areas with a high marketization level, and areas with strong environmental supervision, the synergistic governance effect of dual environmental regulation is more obvious. The inhibition effect mainly depends on the reduction of long-term FFAA, and can simultaneously improve firms' economic and environmental benefits. A mechanism analysis finds that strengthening firm research and development (R&D) innovation and improving total factor productivity are important channels through which dual environmental regulation can collaboratively govern firms to avoid the shift from the real economy to the virtual economy. This study provides new insights for the analysis of the real economy from the perspective of environmental regulation, and also serves as a reference for the improvement of multiple collaborative environmental governance systems.

ESG ratings and corporate competitive strategy: evidence from China

ABSTRACT This paper investigates the impact of ESG ratings on the competitive strategies of Chinese listed companies. Machine learning and text analysis methods are used to develop indicators for cost leadership and differentiation strategies. A time-varying difference-in-differences (DID) model is employed to quantitatively assess the impact of ESG ratings on these strategies. The findings show that ESG ratings positively affect both strategies. The heterogeneity analysis indicates that companies with lower bank concentration or insufficient financial asset allocation benefit more significantly from ESG ratings in enhancing their competitive strategies. This research provides theoretical insights and practical recommendations for the integration of ESG factors into corporate strategy, particularly in resource-constrained environments.

A study of the impact of digital finance usage on household consumption upgrading: Based on financial asset allocation perspective

This paper analyzes the impact of digital financial usage on household consumption upgrading using data from the China Household Finance Survey (CHFS) 2015–2019. Overall, using digital financial services stimulates household consumption and enhances consumption patterns. Mechanistic analysis indicates that digital financial usage positively influences consumption upgrading by optimizing household financial asset allocation. This is evidenced across four dimensions: participation in risky financial markets, augmentation of risky asset allocation, and enhancement of financial investment portfolio diversity and efficacy. Furthermore, the influence of digital financial usage on consumption upgrading varies according to age, wealth, and region differences.

Household risky financial asset allocation in China: The influence of financial literacy dimensions

Household risky financial asset allocation in China: The influence of financial literacy dimensions

Retirement, confucian culture, and household financial asset allocation for older adults

This paper explores the impact of retirement on the financial asset allocation of elderly households and innovatively examines the moderating effect of Confucian culture. Using data from the China Household Finance Survey, the empirical results show that older adults reduce risky assets and increase savings after retirement. Confucian cultural concepts reinforce this conservative trend. The study also reveals the heterogeneous effects of household head health, urban-rural differences, and risk attitudes on allocation. This paper provides an essential reference for optimising the allocation of older households' financial assets and addressing the ageing challenges.

Multilevel social insurance needs and household financial asset allocation

This study selects data from the China Household Finance survey 2019, constructs the residents’ financial literacy index using factor analysis, and uses the probit model to examine the impact of multilevel social insurance demand on household financial asset allocation. This study finds that multilevel insurance demand weakens household financial asset allocation while other factors remain constant; the age of the household head negatively affects the allocation of household risky financial assets; household financial literacy moderates multilevel insurance demand and household financial allocation.

Inhibit or stimulate? Green credit guidelines and corporate financialization

Although the green credit guidelines (GCGs) can force firms to engage in green transformation, it is still unknown whether the GCGs inhibit or stimulate corporate financialization. This research explores the effects and mechanisms of GCGs on financialization of heavy polluters using difference-in-differences estimators. The results indicate that the GCGs tend to strengthen heavy polluters’ motivations for precautionary saving and stimulate them to allocate liquid financial assets, while weakening their motivations for investment substitution and inhibiting their speculative allocation of financial assets. After several robustness tests, these conclusions remain valid. The mechanism tests suggest that the guidelines affect corporate financialization through increased financing constraints and reduced agency costs. Further analysis reveals that both types of financial asset allocation used by heavy polluters increase their levels of total factor productivity and green innovation. Heterogeneity analysis demonstrates that the impact of GCGs is more pronounced in nonstate-owned enterprises and firms which are located in regions with underdeveloped financial development and weak environmental law enforcement. In summary, this research explores the differentiated impacts and economic outcomes of GCGs, which not only provides insights into how financial institutions prevent corporate credit risk and achieve the targeted implementation of GCGs but also has certain reference value for the rationalization of asset allocation and green transformation for heavy polluters.

Analysis of Optimizing the Allocation of Chinese Family Pension Financial Assets

In this era of national aging, social pension insurance can no longer meet the accelerated aging rate. According to statistics, by the end of 2021, the number of elderly people aged 60 and above in China had reached 267 million, accounting for 18 9% of the total population. In 2021, the number of elderly people aged 60 and above in China had reached 267 million, accounting for 18.9% of the total population. It is expected that by 2035, the elderly population will reach 300 million, accounting for 20% of the total population. In 2035, the elderly population will reach 300 million, accounting for 20% of the national population. Due to outdated concepts, the older generation believes that storing money in banks is not a good idea. In order to solve this problem, the country has promulgated the "Personal Pension Implementation Law", which is a type of pension insurance that individuals bear. Due to outdated concepts, the older generation believes that storing money in banks through real estate is safe and lacks correct financial management views. Therefore, the development of pension finance is difficult to implement, especially the understanding of that financial knowledge is needed for the allocation of pension products. To solve the development problem of elderly care finance, it is necessary to first improve the financial concepts of the old so that they can understand the correct financial concepts. Therefore, we will explore the understanding of financial concepts and elderly care allocation among the elderly in China and demonstrate it through data. Therefore, we will explore the understanding of financial concepts and elderly care allocation among the elderly in China and demonstrate it through data. Then, we will combine the theories of some financial scholars to conduct research, hoping to discover the problems of elderly care asset allocation in China through research and propose some of our own opinions.

Data-Driven Financial Strategy Transformation: The Impact of Corporate Data Capital Utilization on The Level of Financial Asset Allocation

Data-Driven Financial Strategy Transformation: The Impact of Corporate Data Capital Utilization on The Level of Financial Asset Allocation

Mitigating Financial Investment Polarization: The Role of Digital Payments in Enhancing Household Participation

ABSTRACT This study examines the impact of digital payments on household financial asset investment, using the China Household Finance Survey (2013–2019). Our findings indicate that digital payments positively affect financial market participation and investment size, reshaping asset allocation structures. While households using digital payments show increased participation and investment amounts across various financial assets, a reduction in the weight of deposits is evident. The study highlights two key channels through which digital payments influence financial behavior: enhancing subjective financial literacy and increasing households’ attention to financial information. The research emphasizes the role of digital payments in mitigating polarization effects in household financial asset allocation.

Air pollution and corporate financial assets allocation: Evidence from China

Understanding the relationship between air pollution and corporate investment strategy has significant implications for both environmental sustainability and economic development. Utilizing data from China's A-share listed companies spanning from 2014 through 2022, we investigate the causal relationship between air pollution and corporate allocation of financial assets. Using an instrumental variable approach, we find that worse air quality has a positive effect on corporate financial asset allocation. Specifically, a 1% increase in the number of air pollution days tends to result in a 0.002% increase in the share of financial assets held by firms. This effect prevails through diverse robustness tests. Furthermore, as companies encounter more stringent financing constraints and environmental regulations, the trend of air pollution promoting the increased financialization of assets becomes more pronounced. Based on the findings, this paper suggests providing more support for enterprises to facilitate the upgrading of production and operation to meet environmental standards.

Research on Household Financial Asset Allocation Based on Population Aging

Research on Household Financial Asset Allocation Based on Population Aging

Corporate ESG Performance and Corporate Value

In the context of China's green development transformation and high-quality development, it is of great significance to actively promote enterprises to practice the concept of ESG development. In order to study the impact of ESG on enterprise value, this paper empirically examines the impact of ESG performance on enterprise value and its mechanism of action, taking listed companies of enterprises from 2013 to 2023 as the research sample. The research results show that ESG performance can significantly increase enterprise value. The study of the mechanism of action shows that corporate ESG enhances corporate value through digital transformation, promoting corporate innovation, and enhancing financial asset allocation. Heterogeneity analyses find that the positive effect of ESG on firm value shows differences among different types of firms, especially among state-owned enterprises and high-tech firms, where the positive effect of ESG performance on firm value is more significant. The research in this paper enriches the impact of ESG on enterprise value, which is of theoretical and practical significance for enterprises, investors and government to complete.

WITHDRAWN: Overseas Operations and Corporate Financial Asset Allocation

Using Chinese listed companies’ data from the 2008–2018 period, this study investigates the impact of overseas operations, proxied by overseas subsidiaries, on financial asset allocation. The results show that, first, in general, enterprises that participate in overseas operations have a higher level of financial asset allocation. Second, heterogeneity analysis at the micro level shows that overseas operations promote both hedged and non-hedged financial assets. The relationship between overseas operations and financial asset allocation mainly exists when the parent company faces more serious financing constraints, no overseas returned executives are present in the parent company, overseas subsidiaries have inconsistent business with the parent, and overseas subsidiaries experience losses. Third, heterogeneity analysis at the macro level shows that compared with overseas operations in Organization for Economic Co-operation and Development (OECD) countries, overseas operations in non-OECD countries have a higher level of financial asset allocation. Furthermore, compared with overseas operations in non-Belt and Road countries, overseas operations in Belt and Road countries have a higher level of financial asset allocation. Overseas operations mainly play a role in promoting financial asset allocation in cases of high economic risk, high political risk, and numerous investment opportunities in areas where overseas operations are located. Fourth, financial asset allocation is beneficial for reducing cash flow fluctuations and operational risk of multinational enterprises, and acts like a reservoir. This study advances research on the determinants of financial asset allocation from the unique perspective of the overseas investment channel, which provides some implications for the Chinese government on its “Go Global” and Belt and Road strategies and realizing financial development to serve the Chinese economy.

Research on the impact and heterogeneity of housing on the allocation of financial assets of households: Evidence from China

This paper investigates the impact of housing with both consumption and investment attributes on the risky financial asset allocation of households, constructs Probit and Tobit models using 2019 China Household Finance Survey (CHFS) data, and proceeds to the mediation effect test and heterogeneity analysis. Results indicate that owning only one house exhibits a crowding-out effect on the risky financial asset allocation of urban households, with the degree of risk preference as the mediating effect mechanism, while owning multiple houses exhibits an asset allocation effect. Housing borrowing other than bank loans inhibits urban households from making risky financial asset allocations. The effect of housing on risky financial asset allocation is heterogeneous by income, age, and region.

Research on the Effect of Financial Asset Allocation on Household Consumption:Based on the Perspective of Wealth Effect

Based on the perspective of wealth effect, this paper uses the data of China Household Finance Survey to explore the effect of household financial asset allocation on consumption.This paper found that there is a wealth effect between household financial asset allocation and consumption,that is,household financial assets have an impact on consumption through the change of holding level.And when we used the instrumental variable to deal with the endogenous problem of variables, the above conclusion is still valid.Similarly,After replacing the empirical model and database,the empirical results are also robust and significant.This paper is of great significance to promote households to allocate more financial assets and release consumption vitality.