In recent years, with the expansion of the financial sector and the growth of capital, non-financial enterprises have become more and more active in the financial field, gradually resulting in the financialization of the economy. With the transformation of the economic activities from substantial to fictitious, the structural problems brought about by China's high-speed economic growth for many years have become prominent, especially the overall operating risk of non-financial enterprises remain high. The existing literature focuses more on the single link between financialization, monetary policy, and enterprise operational risk, but less on putting the three into a unified research framework .
This paper examines the financialization of China's A-share non-financial listed companies from 2007 to 2020 by calculating their financial business profits relative to earnings before interest and tax. Besides, this paper also investigates the effect of financial profits on operating risk and how this effect relates to monetary policies. The empirical results suggest that as the proportion of financial income of non-financial enterprises increases, operating risk also increases significantly. Moreover, the impact of monetary policy on operating risk is more pronounced for companies with higher financial business profits, and this effect varies across different types of firms. Further research shows that the risk effect of enterprise financialization can hinder future value promotion.
This paper measures financialization from the perspective of financial profit and provides reference for avoiding the internal profit crisis of enterprises caused by financialization in the perspective of monetary policy.