The Purchase Behavior of Financial Products by Listed Companies and Their Business Performance

Abstract

Recently, it is more and more common for company to use idle funds to invest in financial products. The topic of financial products’ purchasing behavior has aroused heated discussion. Based on the relevant data of the purchase of financial products by A-share listed companies in Shanghai and Shenzhen Stock Exchanges from 2011 to 2018, this paper empirically explores the impact of the purchase of financial products on the business performance of listed companies. In general, the purchase of financial products by listed companies has an incentive effect on business performance. After distinguishing the nature of company, it is found that the purchase of financial products by non-state-owned company can improve the business performance, while the state-owned company has an opposite result. Thus it can be seen that the nature of company plays a watershed role in studying the relationship between the purchase of financial products and business performance. Further, the company size was used as the grouping basis for the sub-sample regression, and it was found that the significant positive correlation between the purchase of financial products and business performance only occurred in small-scale company. The conclusion of this paper will provide a theoretical basis for corporate managers in capital management, which is of great significance to corporate management.