Research On The Financing Svstem That Drives Enterprise Innovation

From the new normal economy to the supply-side structural reform,the central government has finally found that the key to solving China’s economic problems is to drive economic growth though innovation.A further question to be considered is what kind of financing system can drive innovation.Based on the realistic background that China’s economic growth momentum needs transformation and financing system needs reform,this thesis comprehensively and systematically studies the driving role of the reform of the financing system on the independent innovation of enterprises and the transformation of economic growth momentum from the four perspectives of financing constraints,financing structure,financing mode and financing institutions.Then,this thesis points out the direction of China’s financial system reform and provides policy suggestions.Firsts this thesis introduces the financial sector and financing constraints into a Schumpeterian model of economic convergence,and examines in detail the systematic impact of financing constraints on a country’s equilibrium dynamics.From the opposite perspective,this thesis summarizes the mechanism of how mitigating financing constraints drives enterprises from imitation to innovation and helps the economy to cross the non-convergence trap.The results show that:(1)Mitigating financing constraints can systematically increase the rate of economic convergence.(2)Mitigating financing constraints can significantly increase the degree of economic convergence caused by "strategies to promote innovation".(3)Mitigating financing constraints can push the non-convergence trap back and move the growth maximization equilibrium point ahead to broaden the transition interval for the strategic transformation of enterprises.(4)Mitigating financing constraints can effectively drive the endogenous shift point of strategies to avoid the economy falling into the non-convergence trap.Therefore,this thesis argues that mitigating the financing constraints of innovative projects should become an important goal of the financing system reform.Then,this thesis divides the enterprises’ sources of funds into internal financing,debt financing and equity financing,and divides enterprises into high-funded enterprises and low-funded enterprises.Using the data of China’s non-financial A-share listed enterprises from 2006 to 2016,this thesis deeply analyzes the relationship between financing structure,financing constraints,and enterprise innovation investment.The main findings are as follows:(1)internal financing and equity financing have a significant role in promoting innovation investment,while debt financing has a significantly negative effect on the innovation investment;(2)Compared with low-financing-constraints companies(mature,large-scale,and high dividends),internal financing and equity financing of high-financing-constraints companies(young,small-scale,and low-dividend)have a greater role in promoting innovation investment,and debt financing also has a greater negative effect on corporate innovation investment.It can be seen that equity financing,as a kind of external financing,can really play a role in mitigating the financing constraints of innovative projects.Accordingly,this thesis believes that equity financing should become the main source of external funding for enterprise innovation.Based on the first two parts of the study,this thesis further studies the contribution of different financing models to economy-wide technological progress through the two channels of innovation and imitation.By constructing a Schumpeterian model and constructing empirical analysis,this thesis attempts to answer the question:As the stage of economic development changes,what kind of financing model does the growth momentum conversion need to match?The results show that:(1)The development of capital-based finance promotes productivity growth,and the closer the country or region is to the world’s technological frontier,the higher the marginal increase in capital-based finance promotes productivity growth.(2)Although through the theoretical model constructed in this thesis,we can’t simply determine the direction of debt-based finance’s effect on productivity growth rate,but regardless of the direction of action,its degree of action decreases as countries or regions approach the world’s technological frontier.Therefore,this thesis argues that in the context of China’s current approach to the world’s technological frontier,multi-level capital markets should be built and improved to promote the gradual shift of China’s financing model from debt-based to capital-based.Finally,after determining the development of capital-based financing model,this thesis takes venture capital funds as an example to further explore the mitigating effect of institutional investors on the financing constraints of innovative enterprises,focusing on the differences between government guiding funds and independent venture capital funds.The results show that:(1)In the case of symmetric information and no collusion,independent venture capital funds will mitigate enterprises’financing constraints but reduce the expected earnings of entrepreneurs,which will not change with the increase in research and development risk.By contrast,the government guiding funds will further mitigate enterprises’ financing constraints,as well as increase the expected earnings of entrepreneurs.Furthermore,these impacts will increase with the increase in research and development risk.(2)In the case of asymmetric information and collusion,the role of independent venture capital funds will be strengthened,and these two enhanced impacts will increase with the increase in research and development risk.By contrast,the role of government guiding funds will be weakened,and these two weakened impacts will also increase with the increase in research and development risk.Therefore,in the context of the increase in research and development risk,the necessary condition for government guiding funds to work better is that to strengthen the enterprise information disclosure and to increase the collusion cost.