Management risk appetite, internal control and corporate financialization

This paper examines the impact of management risk appetite on corporate financialization among non-financial firms listed on the Chinese A-share market over the period 2009-2021. The empirical analysis shows that there is a significant positive relationship between management risk appetite and corporate financialization. In addition, the moderation effect results highlight that firms' internal controls play a negative moderating role between management risk appetite and financialization. These findings have far-reaching implications for regulators, standard setters and corporate governance bodies, as they highlight the need for effective internal control systems to ensure financial stability.