How does the anti-monopoly policy affect firms' investment preference?

Using data from 2009 to 2023, the Difference-in-Differences (DID) approach was employed to demonstrate that enacting the Anti-Monopoly Law can effectively inhibit enterprises' financialization. The governance effects are achieved by augmenting monopolies' financial constraints, including debt and equity financing. Heterogeneity analyses revealed that the policy effect is more favorable for sample companies in sectors characterized by lower capital intensity and in locations exhibiting higher levels of marketization. This study enhances the literature on evaluating the effectiveness of anti-money law policies. This paper offers policy insights for the nation to prevent the financialization of firms and the chaotic spread of capital.