Business

Financial asset allocation duality and enterprise upgrading: empirical evidence from the Chinese A-share market

K. Guo, X. Guo, et al.

Discover how financial asset allocation influences enterprise upgrading in China's A-share market. This fascinating study reveals a unique dual effect—short-term assets boost upgrades while long-term assets hold them back, with intriguing variations across different company types. This research was conducted by Ke Guo, Xuemeng Guo, and Jun Zhang.

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Playback language: English

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Abstract

This study examines the impact of financial asset allocation on enterprise upgrading in the Chinese A-share market from 2012 to 2021. It finds a dual influence: short-term financial assets promote upgrading, while long-term assets inhibit it, resulting in an inverted U-shaped relationship. Risk-taking capacity and earnings persistence mediate this relationship. The impact varies across different enterprise types, significantly affecting over-indebted, non-state-owned, and high financing constraint firms.

Publisher

Humanities and Social Sciences Communications

Published On

May 15, 2023

Authors

Ke Guo, Xuemeng Guo, Jun Zhang

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