Abstract: The investment decision of enterprise financial assets is not only affected by the external financial market, but also largely depends on the profitability of the enterprise′s main business.This paper empirically tests the impact of the profitability of main business on the financialization of Chinese A-share non-financial listed companies from 2009 to 2017.The results show that: the profitability of the main business is negatively correlated with corporate financialization. Further moderating effect test shows that executive compensation incentive significantly magnifies the negative relationship between the profitability of the main business and financialization, while executive equity incentive alleviates the negative relationship between the profitability and financialization of the main business, but the regulatory effect is not significant.In addition, in the state-owned enterprises, the profitability of the main business has a greater impact on the financialization of the enterprises; among the constituent assets of the financialization, the profitability of the main business has a greater impact on the available for sale financial assets allocated by the enterprises.The above conclusions show that to solve the problem of “from real economy to virtual economy”, it is necessary to further optimize the industrial investment environment and enhance the profitability of the main business of enterprises; build a reasonable incentive system for senior executives and improve the corporate governance system; improve the financial market, and enhance the strength of financial support for the real economy.

Key words: profitability of main business;executive compensation incentive, executive equity incentive ;financialization of firms