The Study On The Impact Of Diversification On Enterprise Research And Development Investment

In the beginning of the 90’s,the Chinese market began to experience the first wave of diversified operation,many enterprises chose diversified development model in order to take the market share and obtain the economic scale.Due to the diversification of the core resources of enterprises,enterprises cannot put the resources in the R & D project,thus affecting the process of the transformation of the technological innovation of enterprises.On the other hand,the imperfection of the capital market and the imperfection of the financing system make most enterprises in our country face some degree of financing constraint.In particular,a large amount of capital needs to be invested in the early stage of the R&D activities of the diversified enterprises,and the recovery period of the funds is long,which lead to the more difficult acquisition of funds than other common investment projects compared with other common investment projects.To this end,it is necessary to study the theoretical mechanism of the diversification and operation of the R&D investment of the enterprise,and analyze the specific effect of the diversified operation on the R&D investment of the enterprise from the perspective of the financing constraint,which is of great practical and theoretical significance to improve the R&D investment level of our enterprises and to promote the technological innovation of the enterprises to drive the economic growth.For this purpose,this paper selects a listed manufacturing company from 2013-2017 as a sample,and analyzes the influence of diversified operation on the R&D investment of the enterprise based on the financing constraint perspective.Specifically,in the first part of the text,through the review of the existing literature,it is pointed out that the current research diversification and the enterprise R&D investment develop not very well.This paper also has its research value and innovation.In the second part,based on the theory of internal capital market,commission agent,resource base and internal control,this paper discusses the relationship between financing constraint,diversification and enterprise R&D investment.At the same time,the financing constraint variable is introduced,and the adjustment mechanism of the relationship between the diversified operation and the enterprise R&D investment is clarified.In the third part,this paper makes an empirical test about the above-mentioned regulation,and focuses on the following points: the influence of the diversified operation on the R&D investment of the enterprise;the influence of the financing constraint on the diversification operation;the regulation of the financing constraint on the diversification of the R&D investment of the enterprise.The results of the research show that:(1)The diversification of the listed companies in a China-share manufacturing industry will generally inhibit the R&D investment activities of the enterprises.Because of the diversification of the core resources,the heterogeneous resources that are difficult to be replicated are the key sources of the enterprise’s technological innovation through independent R&D,which is not conducive to the R&D investment project of the enterprise.(2)The degree of financing constraint and diversification presents a reverse-related relationship.In other words,the enterprises facing the financing constraint may not choose to form a larger internal capital market through the implementation of the diversified investment to alleviate the financing constraints,but instead reduce the diversification operation investment due to the additional premium cost of the financing brought by the financing constraints and the impact of the shortage of funds.(3)The relationship between the financing constraint and the R&D investment of the enterprise has a positive regulation function,namely,the financing constraint is beneficial to the mitigation of the negative effect of the diversification on the R&D investment of the enterprise.The possible reason is that,when the enterprise is facing a strong external financing constraint,in order to broaden the financing channel,forming the internal capital market through diversification,and improving the allocation efficiency of the internal capital market and enhancing the internal financing ability of the enterprise,so as to improve the R&D investment of the enterprise;On the other hand,because the financing constraint damages the interests of the shareholders,the shareholders increase the management compensation incentive,reduce the agent problem of the diversified operation,and improve the R&D investment activities.When the level of financing constraints faced by enterprises is low,because of enterprises having a variety of financing channels,the enterprise reduce the cash flow held by the prevention motive,the debtors reduce the financial constraints and the supervision of the enterprise,and the managers tend to improve the enterprise scale through the diversification operation,reducing the level of R&D investment.In the light of the empirical results and the conclusions of the research,we make the following suggestions to the enterprise and the government: the enterprises should look at the internal and external environment and the resources more carefully,develop the moderate diversification strategy,so as not to weaken the strength of the R&D investment of the enterprise,and influence the long-term development of the enterprise;The enterprises can also improve the financing constraint level of the diversified enterprises and reduce the motivation of the management to expand the scale,which is beneficial to the improvement of the resource allocation efficiency and the negative effect of the diversification on the R&D investment;and the government can establish a multilevel capital market through the improvement of the financial service system,increasing the policy support to the R&D investment of the enterprise to improve the level of the innovation input of the enterprise.