| "Science and technology are primary productive forces." This saying is never out of date. Since the national "13th Five-Year Plan" was brought out, the "innovation" is guiding us to reform the current science and technology. Thus, R&D and innovation has guiding significance for the development of Chinese enterprises.For information on how to enhance the company's research and development capabilities, many scholars at home and abroad contributing a lot of information, but was constrained by data quality and given times, so their studies are still inadequate.In this paper, we regard R&D and the number of patents as research input variable and output variable, respectively, to conduct our study. And we give suggestions on the adjustment of shareholder equity ratio, the use of constraint relations between shareholders and enhancing the efficiency of corporate governance.The paper is divided into three parts:identify problems, analyze problems, and solve the problems. Introduction is to identify problems. The literature review is to analyze problems. The empirical is used to solve problems.The first chapter is an introduction to explain the background, meaning of the research, the innovation as well as the overall structure of the article.The second chapter is literature review. This chapter first reviews the related articles of ownership structure and corporate performance, and then tells what effects the factors take on R&D activities from both in the company and out of the company. Subsequently, this chapter reviews the former researches from the perspective of the nature of the major shareholders, namely both the state-owned and non-state-owned equity stake described, which leads to the literature on the ownership structure of R&D Activities. Finally, this paper describes the relationship between R&D input and R&D output. At the end of each section of this chapter, its central idea was reviewed.The third chapter is empirical sample selecting. This chapter illustrates how to select the target enterprise. It also describes the selection and composition of econometric model, as well as the composition and used variable names.The forth chapter is to describe the sample data. This chapter shows descriptive statistics and correlation matrices.The fifth chapter is the empirical analysis, which is the key section of this article. This chapter first proposed the hypothesis according to the theory, then established an appropriate panel regression model, including a total of 134 high-tech listed companies'R&D input, output and other indicators. We show the effects of such factors, make a summary, and conduct robust and Hausman test.Chapter VI is the conclusion, suggestion and ways to improve the research of the article. The main conclusions are as follows:I. Influences of shareholders' proportion on R&D activitiesFor R&D investment, while the proportion of A-share tech companies' controlling shareholders gradually increases, the proportion of R&D investment accounted for operating income is showing a trend of up and down, which is shaped like an inverted "U". And when the average equity ratio increases by 1 percentage point each, the input of research and development accounted for sales will rise an average of 0.8387 percent point, which shows the controlling shareholder occupies the central position in the enterprise.For R&D output, we find the second and third largest shareholders'equity ratios have positive and significant influence to research development. That is whenever the ratio of the second and third largest shareholders rise 1 percentage point, the company's patent application number rises by 1.633 and 1.615 units respectively. In this case the non-controlling shareholders have remarkable constrains to the controlling shareholder.II. Influences of shareholders'proportion on state-owned companies'R&D activitiesFor R&D investment, the "U" shaped relationship between controlling shareholder of state-owned high-tech companies and R&D investment exists. On average, there is a significant negative correlation between them. When the ratio of shareholders increases by one percentage point, corporate R&D expenses as a percentage of sales will drop by 1.9952 percentage points. This "U" shaped relationship may be derived from large shareholders against the interests of minority shareholders. Specifically, since the controlling shareholder of the company has absolute control, when its shareholding stake is at a relatively low range and gradually increased to a moderate level, the biggest shareholder may control the company to capture the investment gains. In order to make personal gain for the purpose of investment activities they might even be at the risk of reducing the high NPV projects to do so. Therefore, in the low shareholding stake, both are negatively correlated. When the largest shareholder holding rises beyond this level, the proportion of equity is relatively concentrated. Thus, the controlling shareholder stake accounted for most of the enterprises of the total share capital. At this time if the controlling shareholders continue to disregard the interests of minority shareholders, the company will be faced with the possibility of going broken. Thus, a large proportion of the controlling shareholding enterprises will gradually increase R&D investment to normal levels. There are state-owned enterprises and the capital structure of the "dominance" of the status, reflecting the imbalance, imperfect nature of state-owned enterprises' corporate governance structure.?. Influences of shareholders'proportion on non-state-owned companies' R&D activitiesFor R&D investment, while the non-state-owned high-tech companies' controlling shareholders shareholding ratio increased, its R&D investment increases at first, and then decreases, showing an "inverted U" type movements. On average, whenever its shareholding rises by one percentage point, the cost of research and development investment to sales will increase by 1.410 percentage points. I believe that this "inverted U" type movements arise from differences in state-owned enterprises and non-state enterprises. The latter gets less interferences by the government, so its investment behavior is more rational than state-controlled enterprises. It suggests that in order to obtain high returns and long-term profitability, the company's controlling shareholder in lower stake is more inclined to increase R&D investment (Hill and Snell,1998), so the R&D investment and stake in this phase exhibits positive relationship; And when the stake rises to a higher level, the risk of its holdings increases. So the controlling shareholders become more sensitive, and therefore will reduce the cost of R&D investment and then spend more time and effort on the company's operation efficiency. In the model the ratios of other large shareholders are not statistically significant, and the restrict levels of shareholders are not significant either, which may lead to the insignificance of research activities.For R&D output, the non-controlling shareholders of state holdings have a significant positive impact on companies'R&D activity outputs. Specifically, when the second and third largest shareholders of the company increased by 1 per percentage point, the cost of research and development investment to sales will increase on average 1.533 and 1.150 units. But the model for R&D output is not significant, which the complex linkages between R&D investment (cost) and R&D outputs (patented product) account for.According to the previous paper, the author gives empirical analysis of policy recommendations that companies should follow based on different attributes to adjust its controlling shareholders'ratio. The company should also strengthen the relationship between the use of checks and balances, and make every efforts to implement proxy voting, cumulative voting system to reduce free-riding behavior, in order that the minority shareholders actively participate corporate governance.At the end of the sixth chapter, I explain the limitations and how to improve the research of this article.The innovation of this paper is original perspectives. Former literature usually regards innovation behavior as the input of R&D expenditures, but lacks describing the impact of R&D outputs (i.e. number of patents). This paper studies the corporate governance factors on R&D input as well as output, so this article has a certain originality. |
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