Does financialization of non-financial corporations promote the persistence of innovation: evidence from A-share listed manufacturing corporations in China

Financialization of non-financial corporations is an important factor affecting innovation activities. This paper calculates the optimal financialization of enterprises and the deviation of optimal financialization, divides amples into moderate and excessive financialization, then investigates the relationship between financialization and sustainable innovation in different research samples using the data of A-share manufacturing enterprises in China from 2012 to 2018. The results indicate that the deviation of optimal financialization is negatively related to the persistent innovation of enterprises. However, financialization had significantly different effects on persistent innovation in different research sample. More specifically, excessive financialization could crowd out the persistent innovation, but moderate financialization may promote the persistent innovation. This study provides a new perspective for understanding the relationship between financialization and innovation, and helps finance better serve the real economy.