The Impact of Natural Disasters on the Financialization of enterprises: Facilitation or Inhibition

When faced with the impact of a disaster, do enterprises focus more on industrial development or try to allocate financial assets to smooth out the impact of the disaster on performance? Based on the sample of non-financial listed enterprises in Shanghai and Shenzhen A-shares, it is found that (1) Episodic and compound natural disasters significantly inhibit enterprise financialization (2) Compound disasters leads to an increase in the holding of short-term financial assets. Episodic and compound disasters inhibit the allocation of long-term financial assets. (3) Private enterprises tend to increase holdings of financial assets under compound disaster shocks, and non-high-tech enterprises and enterprises with low financing constraints contract financial asset allocation more significantly under disaster shocks. (4) Enterprises’ self-help behavior and government humanitarian aid during disaster shocks may inhibit their financialisation behavior. The results provide useful guidance for the smooth functioning of the real economy under uncertainty shocks.