The Impact of Foreign Capital Entry on the Business Performance of Listed Grain Enterprises in China

The objective of this study is to examine the influence of the inflow of international investments on the financial success of publicly traded agricultural firms. Utilizing a dataset comprising the financial records of 126 publicly listed agricultural companies spanning from 2003 to 2020, we developed an analytical framework to assess how the pace of international capital inflow acts as a moderating factor in affecting these firms' performance. Our findings indicate that the entrance of foreign capital tends to negatively impact the financial performance of these agricultural firms. Furthermore, a test for variability reveals that the influence of foreign capital on these firms' performance is not uniform and is contingent upon the ownership structure of the enterprises, the maturity of the enterprise, the location of the production area, and before and after the onset of the policy. The regulatory impact indicates that the pace at which foreign investments infiltrate has an adverse regulatory influence on the correlation between the influx of foreign capital and the profitability of publicly traded firms. Hence, in practice, it is imperative to sustain an optimal level of foreign capital inflow within the agricultural sector entities, and fully consider the nature of the enterprises and regional heterogeneity to alleviate the negative impacts of foreign capital.