“From real to virtual” or “from virtual to real”

Innovating the way of investing financial funds is the focus of deepening the reform of the fiscal and taxation system. As a systematic innovation of “allocation to investment”of financial funds, government industry guidance fund is profoundly affecting the development of China’s real economy. This paper empirically analyzes the impact of government industry guidance fund on the financialization of enterprises based on the data of prefecture and municipal government industry guidance fund and the data of listed companies from 2015 to 2023. The conclusion shows that compared with the enterprises not injected by the government industry guidance fund, the government industry guidance fund injection can significantly reduce the level of enterprise financialization, that is to say, it effectively promotes the injected enterprises to move away from the virtual to the real, and after a series of robustness tests, the conclusion still holds. The heterogeneity test shows that this promotion effect is more obvious in private enterprises, regions with strong innovation capacity, and regions with low marketization level. Mechanism analysis finds that the principal-agent and financing constraints of enterprises supported by the government’s industrial guidance fund are effectively alleviated, which in turn promotes enterprises to reduce their financial assets. Further research finds that, compared with the traditional industrial policy of providing financial subsidies, the government’s industrial guiding fund policy, characterized by the “allocation of financial funds to investment”, has a more significant effect on the promotion of enterprises to move away from the virtual to the real. This paper expands the research on government industrial guidance funds to support the development of the real economy, and provides theoretical support for the combination of “active government” and “effective market” to support the development of micro-enterprises and serve the transformation and upgrading of industries.