Financialization of Entity Enterprises and Corporate Performance : Evidence from Sharing Leasing Subsidiaries

Based on the data of A-share companies in Shanghai and Shenzhen from 2007 to 2019, this paper conducts an empirical analysis on the impact of Chinese entity enterprises' sharing and holding financial leasing companies on their business performance. We find that holding the financial leasing company (HFL) will decrease its operating performance significantly, while sharing leasing company (SFL) doesn’t have the same effect. There are many transmission mechanisms deteriorating the performance of HFL: first, HFL will increase the leverage ratio and financial cost; second, HFL will aggravate the investment and financing term mismatch problem; third, HFL will significantly increase business risks, and then reduce corporate performance. Finally, we put forward some suggestions from three aspects