Relationship between Financial Asset Allocation, Leverage Ratio, and Risk‐Taking of Small‐ and Medium‐Sized Enterprises in China: Taking Environment‐Related Industries as an Example

With the improvement of environmental policies and industry requirements for enterprise production and management, small‐ and medium‐sized enterprises in environment‐related industries were also changing. It was known from the existing research that the investment allocation of assets of small‐ and medium‐sized enterprises was closely related to risk and return, and the leverage ratio of enterprises affected the risk‐taking level of enterprises. In the process of sustainable development, enterprises will inevitably bear certain risks, but excessive risk‐taking will bring all kinds of uncertainty and bankruptcy risk to the expected income and future cash flow of enterprises. Therefore, taking small‐ and medium‐sized enterprises in environment‐related industries as an example, this paper put forward relevant assumptions by analyzing the interaction between the existing enterprise financial asset allocation, risk‐taking level and leverage ratio. In order to facilitate empirical analysis, A‐share listed companies in environment‐related industries in Shanghai and Shenzhen stock exchanges, small‐ and medium‐sized board and GEM listed companies in Shenzhen stock exchange from 2007 to 2019 were selected as research samples. These data came from the information open platform for small‐ and medium‐sized enterprises in environment‐related industries, the research reports of third‐party consulting companies and CSMAR and Wind databases. The empirical results showed that the allocation of financial assets had a significant impact on the level of risk‐taking, and there was a U ‐shaped relationship between them when other conditions remained unchanged. At the same time, the financial asset allocation of small‐ and medium‐sized enterprises in Chinese environment‐related industries had a significant impact on the enterprise leverage ratio. Under other conditions unchanged, there was a U ‐shaped relationship between the two. In addition, leverage played an intermediary role in the relationship between financial asset allocation and risk‐taking level. In addition to directly affecting the allocation of financial assets, it can also indirectly affect the risk‐taking level of enterprises through leverage ratio.