R&D Input/Expenditure,Financial Performance,and Firms' Value Growth Of Manufacturing Enterprises

The development level of the manufacturing industry is regarded as foundation laid for a powerful economic country,as well as an important reference point that measures a country's economic strength and competitiveness.Since the Reform and Opening Policy carried out in 1970 s,a great achievements have been made in China's manufacturing industry,which has significantly enhanced the comprehensive power of the nation,and its ever-increasing output veritably makes China a manufacturing power in the world.Nevertheless,there is no doubt that many problems still exist behind those achievements in this industry,especially ”big in the size but not strong in its quality”,for example.This situation of which is needed to be improved urgently.To prompt strengthening the industry on the basis of the current status of the big size,the authority of china has highlighted that implementing the measure of “innovation-driven development” is one of the basic policies for building a real strong manufacturing power.In recent years,research and development(herewith shortly referred as “R & D”)input is known as one of the standards assessing innovation ability of an enterprise,and the country's total input in the regard has been increased and set the record highs constantly.But the low-value-added products,with wide gap with those developed countries in the high-tech area in the world,are still ranked disadvantageously in the middle or low position in the international market,which results in quite limited benefits obtained from the global industries chain.Such being the case,it is necessary to have a study of the subject regarding the impact of the R & D expenditure in a manufacturing enterprise on its financial performance and firm's value.Based on the theories of economic growth,innovation and global industry chain,combined with the research fruits of the scholars from both china and abroad,and taking as a background the current economic situation and the practices of the manufacturing enterprises in their R & D input/expenditure,this article tries to make clear,by the way of empirical research,that what kind of connections and impacts existing between the R & D expenditure of the manufacturing units,their financial performance and firm's values.In the article,the financial data of total 156 enterprises(including 78 listed companies and 78 GEM listed companies)in the period of 5 years in succession from 2011 to 2015 are chosen and adopted for correlation analysis and multiple linear analysis,in which the explanatory variable is set to R & D intensity,explained variables to main business profit margin,net profit growth rate,net cash flow ratio and Tobin Q value,and control variable to total assets and asset liability ratio.The study concluded that manufacturing firms' R & D input/expenditure could promote firms' value growth with its lag characteristic.Comparing with firms in main board,growth enterprise market firms' R & D input/expenditure has more significant effect on firms' value.In order to have more practical meaning of the empirical research,the article finally offers the government,industry and enterprises many proposals in respects of issuing government's preferential policies of encouraging R & D input,promoting communications by industry association as a bridge with enterprises,and ensuring enterprises' spending efficiently and well controlling risk of R & D input/expenditures.