Financial Flexibility,government Subsidies,and Innovation Investment In High-tech Enterprises

With China's economy transforming from the high-speed growth phase to the high-quality development phase,the "L-shaped" economic trend has gradually emerged,and innovation has increasingly become the driving force for transformation and upgrading of China's industrial enterprises.However,innovation is characteristic of high risk,long cycle,and high adjustment costs,leading to enterprises facing severe financing constraints due to insufficient funding and strong investment fluctuations due to uncertain economic impact.Based on the heterogeneity of different property rights of the company,this paper takes the internal financial strategy as the starting point,studying the impact of financial flexibility on innovation investment of Chinese high-tech industrial enterprises,and the regulatory role of government subsidies.Use 1999-2007 China Industrial Enterprise Database,select high-tech companies as sample,calculate cash flexibility and liability flexibility and use the generalized method of moments estimates the investment equation to solve the endogenous problem of the model.It has been found that financial flexibility is positively correlated with innovation investment.Specifically,cash flexibility plays a positive role in innovation investment among the three groups.The positive effect of debt flexibility is significant in foreign enterprises,and that is not significant in state-owned and private enterprises.Considering the interaction of government subsidies and financial flexibility,it is found that government subsidies are substitute of financial flexibility for innovation investment.The substitution effect of government subsidies on cash flexibility weakens in state-owned enterprises,foreign enterprises,and private enterprises.The substitution effect of government subsidies on debt flexibility of private enterprises is stronger than that of foreign enterprises.There is no substitution effect of government subsidies on debt flexibility in state-owned enterprises.In addition,government subsidies have a good signal effect for private enterprises,which improve the debt flexibility of the subsidized private enterprises,and make the flexibility of the subsidized private enterprises maintain the role of innovation in investment promotion.