Shadow banking, credit term structure, and financialization of manufacturing firms

•We examine the relationship between shadow banking and financialization of manufacturing firms.•We find that credit term structure plays a mediating role in the mechanism of action.•Credit term structure increases the positively strengthens this promotion effect. In recent years, there has been a phenomenon of “derealization to virtualization” in China's capital flow. However, studies have focused less on the level of financialization of manufacturing enterprises and the effect of shadow banking. This study found that shadow banking increases the level of financialization of manufacturing firms and the credit term structure positively strengthens this promotion effect. This study offers manufacturing enterprises new perspectives and practical insights to improve their financialization.