Based on the urgent need of the real economy to “get away from fictitious to substantial”, this paper constructs a quasi-natural experiment based on the margin trading program gradually implemented in China in 2010 and studies the influence of the margin trading program on the financialization level of the target company by using the difference-in-difference method. The results show that, because of the dominant role of financing transactions in margin trading programs in China’s capital market, financing transactions drive up the share prices of listed companies, which leads to an excessive easing of the financing constraints of listed companies and short-sighted behavior of executives, which has a significant role in promoting enterprise financialization. Moreover, the driving effect is more significant in state-owned enterprises, enterprises with a high degree of financing constraint, and enterprises with a low degree of marketization. Economic policy uncertainty will restrain the positive effect of margin trading programs on enterprise financialization through information and governance mechanisms. In contrast, the “branding” effect caused by the financial connection of senior executives will intensify the positive relationship between margin trading programs on enterprise financialization levels. When considering the intermediary effect, we find that the margin trading program will result in the optimistic deviation of analysts’ earnings forecasts and cause the external profit pressure of enterprises, thus increasing the financialization trend. This study is of great theoretical significance and practical value for evaluating the policy effect of the margin trading program, improving this policy, investigating the influencing factors of enterprise financialization, and promoting the real economy to move from fictitious to substantial.
Policy uncertainty, lender of last resort and the real economy