Title: Social security payment burden and corporate financialization: Evidence from China’s social insurance law
Abstract: The trend of financialization in Chinese enterprises has garnered significant attention. However, few studies explore this from the perspective of the social security payment burden of enterprises. This study, based on data from non-financial Chinese A-share listed companies from 2008–2022, employs a difference-in-differences model to analyze the effects of the Social Insurance Law on corporate financialization and its underlying mechanisms. The results indicate that the implementation of the China Social Insurance Law significantly increased the level of corporate financialization. Mechanism analysis reveals that this effect is primarily achieved through stimulating companies’ ‘‘reservoir’’ motivation and ‘‘investment substitution’’ motivation. Further analysis reveals that the Social Insurance Law’s promotion effect on corporate financialization is more pronounced in non-state-owned enterprises and those with high financial debt. This effect is also more significant in investment-type and hedging-type financial assets compared to speculative-type financial assets. This research helps to deepen the understanding of corporate investment and financing behavior.
Keywords: Social security payment burden; Social insurance law; Labor protection system; Corporate financialization; Corporate investment behavior
DOI:https://doi.org/10.1016/j.eap.2026.01.047
