Executive Financial Backgrounds and Corporate Financialization: Implications for Regional Non-Government Employment

This study uses data from listed companies and regional indicators spanning 2014–2023 to explore the impact of executives’ financial backgrounds (FRM) on corporate financialization (Fin) and its subsequent effect on the regional share of non-government employment. We estimate firm- and year-fixed-effects models with firm- and regional-level controls, test the mediating pathway, apply an instrumental-variable strategy to address endogeneity, and use propensity-score matching as a robustness check. The findings reveal a significant positive relationship between FRM and Fin, indicating that executives with financial expertise are more likely to engage in financialization strategies that impact corporate financial structure. Furthermore, higher Fin levels are associated with an increased regional share of non-government employment. The analysis demonstrates that FRM influences regional employment indirectly by driving financialization processes within firms. Additionally, the mediating effect of financialization varies across regions with different levels of educational attainment, emphasizing the influence of human capital in shaping financial outcomes.