Financial flexibility and firm performance in Chinese livestock-listed enterprises: the mediating role of financing constraints and the moderating role of environmental uncertainty

Livestock enterprises are characterized by profound volatility in biological assets and policy sensitivity, leading to widespread challenges in financing constraints and environmental uncertainty. This study explores the strategic role of financial flexibility in enhancing firm performance within this volatile context. Using panel data from 70 A-share livestock-listed firms in China from 2013 to 2023 ( N = 542 observations), we construct a composite index of financial flexibility and employ a high-dimensional fixed-effects estimation framework to empirically assess its impact and mechanisms. The results reveal an inverted U-shaped relationship between financial flexibility and firm performance, with an optimal turning point at 0.667, indicating that moderate financial flexibility maximizes firm performance. Moreover, financing constraints act as a significant mediator in this relationship, while environmental uncertainty amplifies the marginal effect of financial flexibility. Robustness analyses confirm the stability of these findings across alternative estimation specifications. The results suggest that maintaining an optimal level of financial flexibility not only alleviates financing constraints but also enhances resilience to external uncertainty. Policy-wise, governments should refine credit-rating and subsidy mechanisms to mitigate financing pressure, especially for small and medium-sized enterprises, while firms should establish early-warning systems of financial flexibility and optimize internal governance to sustain stable performance and promote the sustainable development of the livestock sector.

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Publication Details

Journal
Frontiers in Sustainable Food Systems
Published
2025-12-08
DOI
https://doi.org/10.3389/fsufs.2025.1714193
Primary Topic
Corporate Finance and Governance
Type
article
Field-Weighted Citation Impact
0.00

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article

Financial flexibility and firm performance in Chinese livestock-listed enterprises: the mediating role of financing constraints and the moderating role of environmental uncertainty

Jie Lyu, Zhong Sheng Tong, Lei Zhang, Yuanjie Zhang et al.
Frontiers in Sustainable Food Systems
Corporate Finance and Governance
article

Financial flexibility and firm performance in Chinese livestock-listed enterprises: the mediating role of financing constraints and the moderating role of environmental uncertainty

Jie Lyu, Zhong Sheng Tong, Lei Zhang, Yuanjie Zhang, Guanqiu Yin, Shiyu Liu, Junyan Zhang, Li Geng
article en

Abstract

Livestock enterprises are characterized by profound volatility in biological assets and policy sensitivity, leading to widespread challenges in financing constraints and environmental uncertainty. This study explores the strategic role of financial flexibility in enhancing firm performance within this volatile context. Using panel data from 70 A-share livestock-listed firms in China from 2013 to 2023 ( N = 542 observations), we construct a composite index of financial flexibility and employ a high-dimensional fixed-effects estimation framework to empirically assess its impact and mechanisms. The results reveal an inverted U-shaped relationship between financial flexibility and firm performance, with an optimal turning point at 0.667, indicating that moderate financial flexibility maximizes firm performance. Moreover, financing constraints act as a significant mediator in this relationship, while environmental uncertainty amplifies the marginal effect of financial flexibility. Robustness analyses confirm the stability of these findings across alternative estimation specifications. The results suggest that maintaining an optimal level of financial flexibility not only alleviates financing constraints but also enhances resilience to external uncertainty. Policy-wise, governments should refine credit-rating and subsidy mechanisms to mitigate financing pressure, especially for small and medium-sized enterprises, while firms should establish early-warning systems of financial flexibility and optimize internal governance to sustain stable performance and promote the sustainable development of the livestock sector.

Frontiers in Sustainable Food SystemsVol. 9
Shenyang Agricultural University (CN)
National Natural Science Foundation of China, Ministry of Education of the People's Republic of China, National Social Science Fund of China
Openalex Percentile: Top 46%
Corporate Finance and Governance
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