Research on the Impact of Strong Financial Regulation on Enterprise Total Factor Productivity—Evidence Based on the Introduction of New Asset Management Regulation

Abstract

This study evaluates the impact of strong financial regulation on enterprise total factor productivity (TFP) using the 2018 New Asset Management Regulation (NAMR) as a quasi-natural experiment. Based on data from Chinese A-share listed firms (2014-2022), the results show that NAMR significantly reduces TFP in firms with higher pre-policy financialization, indicating a short-term efficiency cost. The negative effect operates through increased financing constraints, reduced innovation, and aggravated maturity mismatches. Heterogeneity analysis reveals that the effect is stronger in regions with lower banking competition and weaker in firms with financially experienced executives. These findings provide micro-level evidence on the efficiency trade-offs of financial regulation and inform policy efforts to balance financial stability with real economy development.