Internal Control,institutional Environment And Corporate R&D Investment

Innovation is an important source for enterprises to establish competitive advantages,and it is also an important driving force for a country to promote economic development.In the past 40 years since the reform and opening up,China's economy has developed rapidly.However,it has relied heavily on the development model driven by factors and investment behind the rapid economic development,which has severely restricted the sustainable development of China's economy.To promote the long-term sustainable development of China's economy,we must make the mode of economic development from factor-driven and investment-driven to innovation-driven,and implement investment-driven development strategy.As the microcosmic subject of economic operation,enterprises are the core link of the innovation system.The innovation of enterprises relies on the long-term effective input mechanism,so it is particularly important to thoroughly study factors to effectively promote corporate R&D investment.As the institutional foundation and implementation mechanism of corporate governance,internal control can reduce the asymmetry of information inside and outside the enterprise and ease financing constraints,reduce agency costs and mitigate conflicts of interest,reduce innovation risks and form a virtuous circle,and then promote corporate R&D investment.In addition,the institutional environment will affect the positive effects of internal control on the role of R&D investment.Based on this,in order to provide beneficial reference for the promotion of enterprise innovation and development,this paper studies the relationship between internal control and corporate R&D investment and the influence of institutional environment on the relationship between the two.Firstly,the literature related to internal control,institutional environment and corporate R&D investment are reviewed.On this basis,combined with information asymmetry theory and principal-agent theory,this paper analyzes influence mechanism of internal control on corporate R&D investment and influence mechanism of institutional environment on the relationship between the two,and put forward research hypotheses.Secondly,taking the A-share data of Shanghai and Shenzhen stock market from 2008 to2014 as research samples,this paper empirically verifies the influence of internal control on corporate R&D investment,and further explore the influence of institutional environment such as marketization process,legal environment and government intervention on the correlation between the two through descriptive statistics,correlation analysis,and multiple linear regression analysis.In this paper,the research results show that high-quality internal control can significantly promote corporare R&D investment,and there is a positive correlation between the two.The positive correlation between internal control and corporare R&D investment is affected by the institutional environment in which the enterprise is located.Specifically,the faster the marketization process,the better the legal environment,and the less government intervention in the region where the enterprise is located,the stronger the role of internal control in promoting R&D investment.Compared with the existing research,the innovation of this paper is to discuss R&D investment issue from the perspective of internal control.At the same time,this paper regards the institutional environment as an influencing factor for the correlation between internal control and corporate R&D investment,and incorporates it into the research model and analysis framework of internal control and corporate R&D investment to conduct more comprehensive and systematic research.