Empirical Study About The Effects Of Capital Structure Of Innovation Investment On Enterprise’s Innovation Performance

China is committed to be an innovation-oriented country, and enterprises are the core of innovation activity with their innovation performance as main evaluation indicator. The academic research on corporate innovation performance has been a continuation, and burst out unprecedented vigor.Based on the quarterly financial report of large and medium-size industrial listed enterprises from2005to2012, we adopt a modified Cobb-Douglas model to analysis the relationship between the capital structure of input and innovation performance. Empirical study shows that:(1) Compared with the equity capital, the free cash flow and reserved fund play a more significant role in the improvement of innovation performance;(2) long-term loans can promote enterprise innovation more sustainably than short-term loans, and the lag effect of debt (the relationship between time and performance) takes on an inverse U shaped;(3) a concentrated ownership structure can ensure innovation performance to a certain extent, and they affect innovation performance via the reserves fund.On the basis of analysis, we put forward the following suggestions:(1) deploying the free cash flow reasonably to ensure stable capital supply;(2) taking the advantage of "tax shield effect" of the debt, and improving the role of operating leverage in the business innovation process, while appropriately reducing the role of financial leverage;(3) building connection actively between enterprises, corporations, research institutions and universities to make full use of social capital and form the chain of formation, production, diffusion, and absorption of knowledge.