Research On The Impact Of Internal Control Of Private Enterprises On Firms' Innovation Efficiency

As the core competitiveness of enterprises in the new era,innovation can strongly promote the transformation and development of the economy,enhance the vitality and motivation for comprehensively deepening reforms,and enable the rapid growth of the national economy,For more than 30 years since China's reform and opening up,private enterprises have gradually grown into an important supporting force for social and economic development,bringing fresh vitality into economic development.However,private enterprises that play such an important role in the national economy generally have the problem of low efficiency of innovation.In order to enable it to develop healthily,it is imperative to seek corporate governance methods that increase its innovation efficiency.According to existing studies,the reasons for the low innovation efficiency of private enterprises are information asymmetry,principal-agent issues,and the inherent risks of high risk,widespread radiation,and inadequate protection of intellectual property,and internal control as a kind of corporate governance.As an approach,internal control can effectively alleviate information asymmetry and agency problems,control risks,and protect innovation results and benefits.In addition to corporate governance factors,the institutional environment will also affect the efficiency of private enterprises' innovation.Under the special circumstances of China,the political associations between private enterprises and the government will have an impact on their own behavior.Therefore,this thesis tries to concern about the background of political associations,and further studies the influence of internal control on the efficiency of corporate innovation from the perspective of the role of political associations regulation.This thesis takes enterprises listed on China's Growth Enterprise Board as the research object,adopts the method of combining theoretical analysis and empirical test together,and conducts research from the following aspects:First,this thesis reviews literature related to three variables(enterprise innovation efficiency,internal control,and political associations)and summarizes and analyzes relevant theoretical and institutional backgrounds involved in the research.Second,based on literature review and theory foundation,this thesis proposes the hypothesis that internal control and its five elements(control environment,risk assessment,control activities,information and communication,and internal oversight)are positively influencing an enterprise's innovation efficiency,and through empirical testing,this thesis finds out that high-quality internal control can effectively enhance the company's innovation effectiveness.Third,by analyzing the impact of political associations on private enterprises and the will of private enterprises,this thesis proposes that political associations positively regulate the promotion of internal control on the efficiency of innovation,and then divides political associations into chairman's political associations and general manager's political associations to study their role in regulating the relationship between internal control and innovation efficiency respectively.The results of the study show that political associations positively govern the effect of internal control on the efficiency of innovation.However,due to the deviation of the core purpose of the establishment of political associations between general manager and chairman of the board,the regulatory effect of the general manager's political associations is not significant.According to the research results,this thesis believes that strengthening the internal control construction of private enterprises is conducive to the improvement of corporate innovation efficiency,and the impact of five factors of internal control on innovation efficiency is not the same.The reasons for different results are also analyzed in this thesis.Appropriate use of political associations will help private enterprises improve their innovation efficiency.In the end,this thesis proposes relevant suggestions for reference for the research results.