Does Corporate Financialization Have a Non-Linear Impact on Sustainable Total Factor Productivity? Perspectives of Cash Holdings and Technical Innovation

This study explores the conditions under which financialization may foster sustainable total factor productivity (TFP). We examine inverted U-shaped relationship between corporate and TFP by employing a panel threshold model using microeconomic non-financial data from Chinese firms in 2007 to 2018 period. Our results suggest that turning point is more significant holding short-term financial assets state-owned enterprises. The effect suggests technical innovation determines optimal at affected financialization. Further, considered an alternative cash order increase value of capital, leading positive on TFP. Contrary their effects below thresholds, exceeds certain level, displaces innovation, becomes detrimental analysis thus establishes importance growth minimize adverse