External Governance Environment,Degree Of Separation Of Control And Ownership And Enterprise R&D Investment

As China's economy enters a new stage of "new normal" development and international competition intensifies,the improvement of independent innovation capability plays an increasingly important role in economic development.Technological innovation has become the core of enterprise and industrial competitiveness,and it is an important manifestation of national competitiveness.For China in the new era,technological innovation is the premise for enterprises to reduce production costs,explore new markets and enhance competitiveness.It is also an important engine for China to move from "made in China" to "created in China".Thus,innovation is the main source and fundamental driving force for enterprises to improve their competitiveness and gain competitive advantages.As a future-oriented strategic investment,R&D investment is the foundation of technological innovation and the necessary condition to promote the improvement of enterprises' independent innovation ability.Therefore,the enterprise's research and development funds have become one of the main factors determining the enterprise value creation.Due to the uneven economic development level among different regions in China,the financial development level,marketization degree and the construction level of the rule of law society in different regions will have an important impact on the R&D investment of enterprises.In addition,in the current situation where the separation of control and ownership of actual controllers is common,the main agency problem of companies is no longer simply the agency conflict between managers and external investors,but the agency conflict between controlling shareholders and minority shareholders.Therefore,the agency conflict between the actual controller and other shareholders will also affect the investment decision of the enterprise when it decides to carry out research and development.A special institutional background in China,the nature of property rights is also the important factors that affect enterprises to carry out various kinds of decisions,there exist differences in different company property rights background of agency costs,and also different nature of property right of enterprise control of the controlling shareholder will also face a different cost,so the property nature of the problem of agency for different enterprises will also different impact on the enterprise investment decision.Through reading and sorting out the relevant literatures at home and abroad about the external governance environment of enterprises,the separation of the two rights of the ultimate controller and the R&D investment of enterprises.This paper takes the external governance environment of enterprises and the separation degree of ultimate control and ultimate ownership as two important factors affecting the R&D investment of enterprises.By referring to the methods adopted by previous scholars,this paper quantifies the external governance environment by using the score results of marketization comprehensive index.On the basis of law and financial theory,principal-agent theory and innovation theory,we put forward reasonable hypotheses about the relationship between external governance environment,separation of two rights and enterprise R&D investment.Lastly,this paper selected 2009~2016 A-share listed companies in China as sample.The data of external governance environment refer to the total index of marketization process disclosed in Marketization of China‘s Province 2018 report compiled by Wang Xiaolu,Fan gang et al.and other relevant financial data comes from CSMAR and iFind.We used Stata14.0 statistical analysis software to establish the research model and performed multiple regression analysis,then obtained the corresponding conclusions.This paper has three main conclusions:(1)The improvement of external governance environment can significantly promote the R&D investment level of enterprises.(2)Based on all the analysis samples,the degree of separation of two rights of the ultimate controller will have a negative impact on the intensity of enterprise R&D investment,and such negative impact mainly occurs in non-state-owned enterprises;If the analysis sample is limited to state-owned enterprises,the separation degree of ultimate controller's two rights will promote the R&D investment of enterprises to some extent.(3)If we examine the joint influence of external governance environment and the degree of separation of two rights,we find that the degree of separation of two rights will negatively regulate the influence of external governance environment on enterprise R&D investment.Therefore,the improvement of the external governance environment and the control of the separation of the two rights of the ultimate shareholders by the state will play a very important role in the R&D investment level of the enterprise.