Investment In Financial Assets Research Articles

Economic Environment Uncertainty and Financialization of Real Estate Firms

This paper investigates the impact of economic environment uncertainty on real estate firms' financialization and explores the underlying mechanisms. This paper utilizes data from listed real estate firms from 2011 to 2021, focusing on the rationale for firms' financialization. In contrast to prior literature, this study employs the macro-level economic uncertainty index and the micro-level uncertainty perception measures to gauge economic environment uncertainty. The findings indicate that an increase in economic environment uncertainty leads to a greater inclination of firms to engage in financialization, driven by the "precautionary savings" motivation. Furthermore, this effect is primarily driven by the firm-level perception of uncertainty in the external environment. Mechanisms tests demonstrate that when there is uncertainty in the economic environment, corporations are more likely to engage in financialization, primarily due to decreased CEO overconfidence and reduced corporate risk-taking. Moreover, the level of financing constraints and executives with financial expertise contribute to the heterogeneous effects of uncertain economic conditions on real estate firms' financialization. Firms with high financing constraints and financial background executives are more likely to engage in and enlarge investments in financial assets, while firms without financial background executives are not. Furthermore, there is no notable correlation between the level of financialization of state-owned enterprises and policy fluctuations in the economic environment. The findings provide valuable insights for businesses to explore alternative paths for growth, raising awareness among government regulators about the risks associated with financialization.

Information and analytical aspects of financial investment management of a medical organization

For Russian companies, solving problems related to the management of financial assets and instruments has become much more complicated under the influence of global changes over the past few years related to external negative political and financial and economic processes. The increase in the scale of activities of commercial medical organizations in recent years, one of the main reasons for which are the negative effects of the recent pandemic on public health, is accompanied by an increase in the volume of services provided, income and income of additional funds that need to be invested in various assets, one of which is financial investments. Restrictions on access to Western financial trading platforms to achieve the necessary efficiency of the organization’s financial portfolio, difficulties in the operation of the system of external financial settlements and payment obligations, and many other risky events led to the need to search for alternative transactions with financial resources of companies, new directions and forms of investments of available funds. The issues discussed in the article are devoted to the creation of an optimal policy for managing investments in financial assets of an organization, which should be based on high-quality information, analytical and methodological support.

Analysis of The Influence of Information Availability, Economic Factors and Changing Trends on Travel Agent Business Sustainability in Digital Era

The goal of this study is to identify key factors in travel agent management and then differentiate their impact on the value creation of these companies. Researchers group methodologies for analyzing value creation in travel agencies into several main categories. The methods are interview and economic-financial analysis. Then we identify value creation indicators to determine economic value-added options, then we conduct empirical contrast. The research results reveal that travel agents, acting as intermediaries, have become highly relevant, absorbing nearly all industries of this sector's production. The historical analysis concludes that travel agents underwent a positive evolution in value creation during the studied period. The revolution in information technology, which increased staff productivity, and the process of sector concentration and association, which increased rotation, are the main factors driving this evolution. Investments in financial assets, tangible assets, and intangible assets also play an important role in transforming the sector's productive structure. While the evolution of margins plays a less significant role in value creation, the sector faces challenges due to price wars and strong competition. The positive impact of the sector's debt also increased, contributing to a significant increase in economic value-added. Finally, travel agents need to pay attention to these factors in their management in order to remain competitive and achieve their ultimate goal of creating value in this sector.

The impact of the investment expectation gap on households’ risky financial asset investment

Rational household asset allocation is crucial for the accumulation of household wealth. However, there is still a widespread phenomenon of limited participation among households. This paper aims to explore the impact of the investment expectation gap on households’ risky financial asset investment. Utilizing data from the China Household Finance Survey 2019, this paper systematically investigates the role of the investment expectation gap in risky financial asset investment through the Probit and Tobit models. The study reveals that the investment expectation gap has a significant negative impact on the investment probability (Average Marginal Effect, –0.118, p < 0.01) and holding proportion (β, –0.082, p < 0.01) of household investment in risky financial assets. This conclusion remains robust after conducting robustness tests by replacing the explanatory variable and performing subsample tests and endogenous treatment. The analysis of transmission mechanisms revealed that an expanding of the investment expectation gap would concurrently result in a decline in households’ assessment of stock’s profitability (Average Marginal Effect, –0.080, p < 0.01), the satisfaction with current asset allocation (β, –0.167, p < 0.05), and the subjective well-being of household members (β, –0.289, p < 0.01). Furthermore, the investment expectation gap not only hampers household investment in risky financial asset, but also diminish the household savings rate (β, –0.055, p < 0.01). This study demonstrates that helping households form reasonable expectations for risky financial assets investment returns will contribute to diversifying household asset allocation and enhancing satisfaction with investment decisions. AcknowledgmentThis study is funded by the Chongqing Social Science Planning Fund, grant number (2021BS052).

The impact of Chinese public expenditures on household investment in risky financial assets: Evidence from a national survey

AbstractUsing data from the 2012, 2013, 2015, 2017, 2018, and 2021 Chinese General Social Survey (CGSS), this paper investigates the effect of public expenditures on household investment in risky financial assets. Our findings show that a higher level of public expenditures significantly increases household investment in stocks and other risky financial assets and that the respondent's overconfidence in their financial well‐being partially mediates such an effect. We further provide evidence that the influence of public expenditures on household investment behavior in risky financial assets is robust after considering various sample heterogeneities by disaggregating public expenditures and risky financial assets into different subcategories and dividing households into different age and socioeconomic groups.

Can government supervision alleviate the deviation of enterprises from the real economy to the financial sector: Evidence from China

AbstractIn China, the deviation of enterprises from the real economy to the financial sector has raised concerns. Using a sample of listed companies held by central state‐owned enterprises from 2009 to 2018, we investigate the influence of government supervision on this deviation. We find that government supervision effectively reduces investments in financial assets by central state‐owned enterprises. The impact is more significant in enterprises with internal control deficiencies, especially in those related to finance. Further study finds that the effect of government supervision conducted for the first time, second time, and third time shows a decreasing trend.

Empowering Indigenous Wealth: Analyzing Financial Literacy, Risk Preferences and Stock Market Engagement within Scheduled Tribes in India

The purpose of this study is to address the enduring multi-dimensional poverty faced by nearly 65 million Scheduled Tribes (STs) in India, with one prominent cause being their limited investments in productive financial assets. Financial literacy has been identified as a crucial factor in enhancing personal financial management skills. The focus is specifically on investigating the relationship between financial literacy, sociodemographic factors and stock market participation among STs in Himachal Pradesh, India. Using a structured questionnaire, data was collected from 300 ST households. The study employed multinomial logistic regression to analyze the impact of financial literacy and sociodemographic variables on stock market participation. The findings indicate that a significant majority of STs (over 80%) lack financial awareness and do not participate in the stock market. Notably, financial illiteracy, risk tolerance, age, education and income were identified as significant factors influencing SMP. The insights derived from this research offer valuable guidance for policymakers, financial institutions and educators, urging the development of targeted interventions. These interventions should empower tribal individuals to make informed financial decisions and encourage their engagement in stock market activities.

How Does Fertility Policy Relaxation Affect Household Financial Asset Allocation? Evidence from the Universal Two-Child Policy in China

Both fertility policy and the healthy development of financial markets are important topics for sustainable economic and social development. By using the difference-in-difference (DID) model, this paper investigates how the universal two-child policy (UTCP) in China aiming to improve fertility affects household financial asset allocation, based on the China Family Panel Studies (CFPS) data from 2010 to 2018. The results show that the implementation of UTCP has a significant negative impact on household risk asset holdings. Specifically, the policy decreases the probability of households participating in the financial market by 3.1 percentage points, reduces the total value of risk assets held by 50.2%, and lowers the proportion of risk asset investment by 1.76 percentage points. Mechanism analysis suggests that the implementation of the policy has a significantly negative impact on labor market outcomes for women, which decreases household income and increases the time and effort spent on caring for children. As a result, the financial resources available for household financial asset investment are diminished, and the time for activities such as information gathering and financial asset transactions is squeezed out, ultimately leading to a decrease in household risk asset investment. Heterogeneity analysis reveals that households with self-employed wives (higher income instability), households without a co-resident status with grandparents (more time spent on childcare), and high-income households (stronger willingness to have more children) are more affected by the policy. This study provides new supplements on how fertility policies affect the allocation of household financial assets and proposes constructive suggestions on how to establish a comprehensive system of childcare welfare and alleviate the economic pressure of family childcare in developing countries.

Study of the Impact of Housing Provident Fund on Urban Households’ Investment in Risky Financial Assets

 Based on the 2019 CHFS data, this paper utilizes the Tobit model to consider the impact of housing provident fund on urban households' investment in risky financial assets and its mechanism of action. The results show that holding housing provident fund is increases the investment ratio of urban households for financial products and risky financial assets, and there are differences in household income levels and financial literacy. Further research found that housing provident fund significantly increases urban households’ future expectations and happiness, and thus increases the investment ratio of households in financial products and risky financial assets. The better the household’s financial situation, the higher the rate of investment in financial products and risky financial assets will be when the household owns housing provident fund.

Impact of Economic Policy Uncertainty on the Financialization of Firms: Evidence from China

This paper aims to explore the impact of economic policy uncertainty on the degree of financialization of enterprises. Taking the A-share listed companies in Shenzhen and Shanghai from 2003 to 2022 as an example, the research shows that economic policy uncertainty has a promoting effect on the financialization trend of enterprises. Economic policy uncertainty significantly increases the proportion of financial asset investment of real enterprises, aggravates the financialization trend of enterprises, and produces the worry of industrial hollowing out. To restrain the process of enterprise "from real to virtual", this paper puts forward corresponding solutions from the level of state and enterprise.

Do International Trade Frictions Influence the Competitiveness of Entity Enterprises? Evidence from the Perspective of Financialization

International trade frictions have changed the business environment of enterprises. However, how do these changes influence the behavioral decisions of enterprises, and will this further affect enterprise competitiveness? Exploring these questions will help determine the influencing mechanism of external negative impacts, such as international trade frictions, on the competitiveness of entity enterprises. In this study, the influences of China-U.S. trade friction, which served as an exogenous research event, on the competitiveness of entity enterprises were empirically analyzed via a difference-in-difference (DID) model with semiannual report information of Chinese nonfinancial A-share listed companies in 2016 to 2020 as research samples. Research results show that the China-U.S. trade friction promotes enterprises to enlarge their financial asset investment by changing the business environment of enterprises. Moreover, this friction further weakens the enterprise competitiveness, an essential element of industrial investments. As revealed by further heterogeneity analysis, the China-U.S. trade friction has generated heterogenous influences on enterprise competitiveness in the aspects of investment motives, industry, competition status, and internal governance mechanism. In this study, two types of enterprise competitiveness elements—environment and resources—were included into the same research framework, and the category of theoretical research on the connotation of enterprise competitiveness was expanded. Moreover, this research provided new scenes and evidence for identifying the causal relationships of the impacts of exogenous negative events with the financial behaviors and competitiveness of entity enterprises, Furthermore, it rendered countermeasure paths and policy suggestions for scientifically coping with international trade frictions and enhancing the competitiveness of entity enterprises. Subject Classification Codes: F51; G31; G32; L25

Financial Literacy and Investment Intention in Financial Assets: A systematic Literature Review Synthesis

The purpose of this study is to contribute through highlighting importance of FL while investments in financial assets. In this study, we use systematic literature review approach to evaluate the impact of FL on investment intention in financial assets. This review has many conceptual and theoretical implication as it provides a deep understanding of impact of FL on investment intention, which could be very useful for finance practitioners. More specifically,  the study aims to provide useful information to strategist in financial firms, advisors to state, investors who trade on the stock exchange, fund  managers, financial analyst and strategist, investment bankers, traders/brokers at the stock exchange, policymakers, academics and market players to make effective decisions, as well as provide suggestions for potential future actions for the government to encourage investment by households by understanding the nature of their problems. This study contributed conceptually as one of the few and authentic SLRs which highlights the importance of FL influence on financial assets investment intentions by presenting the authentic and contemporary published literature on the specific subject.

Corporate risk and financial asset holdings

We investigate the impact of corporate risk on financial asset holdings in China from 2007 to 2020. This study constructs a more precise measurement of financial assets than prior studies, and employs a new textual measure of comprehensive firm risk. Our results show that firms with higher risks hold more financial assets, especially more short-term financial assets, to enhance liquidity and financial performance. In the cross-sectional analyses, we find that the positive relation between risk and financial asset holdings is more pronounced when firms face greater financial constraints, have weaker corporate governance, and have poorer growth prospects. We further find that financial asset holdings alleviate (worsen) the negative impact of risk on firms' real investments in capital expenditures (R&D investments). These results suggest that in the impact of risk on capital expenditures (R&D investments), the positive (negative) role of financial assets in improving liquidity and financial performance (worsening uncertainty and crowding out real investments) appears to be dominant. Lastly, we break down a firm's comprehensive risk into four distinct risk subcategories: financial risk, litigation risk, systematic risk, and idiosyncratic risk. We find that firms tend to increase their holdings of financial assets in response to higher financial and litigation risks. Our novel evidence suggests that firms' higher risks lead to more investments in financial assets, which in turn affect the negative impact of risk on firms' real investments. Overall, our findings highlight the importance of financial assets as a unique risk management instrument.

Impact of digital finance on the asset allocation of small- and medium-sized enterprises in China: Mediating role of financing constraints

Digital finance has provided informal financial support to small- and medium-sized enterprises (SMEs) and solved the dilemma of acquiring formal financial support in emerging economies such as China. However, this may lead to structural changes in entity enterprises’ asset allocations. Based on SMEs listed on the Shenzhen Stock Exchange: Small and Medium Enterprise Board from 2011 to 2018, this study empirically examines the underlying mechanism of digital finance on the asset allocation behaviors of SMEs. The results show that digital finance enables SMEs to allocate more financial assets, thus intensifying the level of financialization of asset allocation. Furthermore, financing constraints partially mediate the relationship between digital finance and the financialization of asset allocation. Further, we investigate financialization motivation in particular and find that the impact of digital finance on the financialization of enterprises is more significant in enterprises with more investment opportunities and in areas with a speculative atmosphere. The results support that SMEs’ financial asset investment has an investment substitution motive rather than a reservoir effect. Digital finance relieves SMEs’ financing constraints and reduces their financing costs. When financing constraints are alleviated, digital finance also prevents the tendency of financialization in SMEs’ asset allocation. This study offers useful policy implications for preventing SMEs’ investment distortions in the development of digital finance.

The impact of investments in financial assets on the financial position and profitability of insurance companies in Croatia

The impact of investments in financial assets on the financial position and profitability of insurance companies in Croatia

A research agenda on portfolio diversification, government regulations, and the financial performance of deposit-taking SACCOs in Nairobi County, Kenya

The purpose of this study is to examine the relationship between portfolio diversification, government regulations, and the financial performance of DT SACCOs in Nairobi County, Kenya. It aims to determine the impact of financial asset investment on the financial performance of deposit-taking SACCOs in Nairobi County, Kenya; the impact of loan portfolios on the financial performance of deposit-taking SACCOs in Nairobi County; and the moderating effect of government regulations on the relationship between portfolio diversification and the financial performance of deposit-taking SACCOs in Nairobi County, Kenya. Capital market theory, modern portfolio theory, risk aversion theory, arbitrage portfolio theory, and decision-making theory will serve as the study's foundation. For the period under review, secondary data will be collected from audited annual financial statements included in SASRA reports.

Social Capital and Well-Being of Small-Scale Fishers in the West Coast Island of Peninsular Malaysia

Poverty in small-scale fisheries is a global issue; most of the time, the solution to poverty is discussed through economic variables. Scholars highlight the contribution of social capital factors to the livelihoods of small-scale fishing communities and suggest that social aspects can be used as an alternative solution to reduce poverty. The concept of social capital has been extensively used to explain the relationship between social capital factors and wellbeing. The role of social capital in the well-being of small-scale fisher communities in Malaysia needs to be clarified. The current study investigates the contribution of various livelihood assets to the household income of small-scale fishers in Malaysia. Data for the survey were collected from 182 respondents from across multiple fishing villages on Langkawi Island, off the west coast of Peninsular Malaysia, using a structured questionnaire. The partial least square (PLS) technique was applied for statistical analysis. The study’s empirical findings depict that social capital, trust, job experience, and financial capital are important factors contributing to fishers' household income. The results show that the contribution of social capital and trust factors are significant to household income, indicating that social factors are essential in improving the well-being of small-scale fisher households in Malaysia. Policy for livelihood improvement of small-scale fisheries in Malaysia needs to prioritise investments in financial, human, natural and physical capital assets.

The Impact of Gambling Culture on Entity Financialization

Culture is an important factor that affects the investment behavior of enterprises, while gambling culture to a certain extent reflects people’s risk-taking spirit or speculative preferences. Taking Chinese A-share listed companies from 2008 to 2020 as a sample, we ran industry and year effect regressions to test the impact of gambling culture on corporate financialization from the perspective of speculative culture. Gambling culture is measured by regional per capita lottery consumption. The results show that a gambling culture plays a significant role in promoting the share of financial assets held by local enterprises. Economically speaking, every CNY 1000 increase in per capita lottery sales will lead to a 3% increase in the share of financial assets held by local enterprises. It is verified that a gambling culture affects corporate financial asset investment by enhancing management’s overconfidence level. In addition, by subdividing financial assets, we find that a gambling culture mainly increases holdings of profit-driven financial assets. Heterogeneity tests show that economic policy uncertainty, corporate performance pressure, and attribution of corporate property rights play a moderating role in the relationship between gambling culture and corporate financial asset investment. The conclusions of this paper help enrich the study of the economic consequences of gambling culture for micro-enterprises and broaden the understanding of financialization from a cultural perspective.

Research on the Impact of Local Public Debt on Enterprise Investment Structure

The paper studies the impact of local public debt on the investment structure of enterprises. Specifically, this paper selects the local public debt data at the prefecture-level and the financial data of Shanghai and Shenzhen A-share listed companies from 2007 to 2015 as research samples. Based on the tax burden theory and financing constraint theory, using the fixed effect model of panel data, empirically tests the impact of local public debt on enterprise investment structure. The research shows that the expansion of local public debt will increase the investment in fixed assets of state-owned enterprises and decrease the investment in financial assets; the investment in fixed assets of private enterprises will decrease and the investment in financial assets will increase. Therefore, the impact of local public debt should be managed according to the classification of different enterprises.

Fixed investment or financial assets investment: Evidence from political uncertainty in China

AbstractUsing a comprehensive dataset of listed firms and detailed turnover data on top provincial leaders in China, we explore how political uncertainty affects a firm's portfolio choice. During political turnover, a firm decreases its fixed investment and increases its financial asset investment, but the promotional effect of political turnover on the financial asset investment of politically dependent enterprises (PDEs) is not obvious. We explain this finding through the mediating effect of stock price informativeness and degree of political dependence. Our results suggest that non‐PDEs rely on market information to make investment decisions, whereas PDEs are also affected by political resource information.