The Research Of The Impact Of Equity Offering On Corporate Innovation With External Financial Dependence Perspective

With the rapid advancement of technology and the increasingly fierce of global economic competition,innovation is crucial to promoting the development of China's economy and enterprises.However,R&D and innovation projects of enterprises are generally subject to external financing constraints due to the inherent characteristics of R&D and innovation activities.As a important way of equity financing,equity offerings can bring funds to the enterprise's innovation activities,alleviate the financing constraints,and thus promote R&D investment and innovation output.However,due to the imperfect development of China's current capital market,the behavior of listed companies' equity offerings has the motive of encircling money.Therefore,we have a doubt: Can equity offerings in China's capital market effectively promote the R&D investment and innovation output of the company's R&D and innovation activities? Because of corporate own characteristics or the characteristics of the industry,the degree of external financial dependence of enterprises is different.How does this external financial dependence affect the effect of equity offerings on corporate R&D investment and following innovation output? The answers to these questions will help to further explore and explain the impact of listed companies' equity capital refinancing on corporate R&D and innovation and the difference of this impact for different companies and industries.Therefore,Based on Chinese listed companies in the manufacturing industry from 2007 to 2015,this paper uses Heckman-two-stage regression method to investigate the effect of equity offerings on corporate R&D investment and innovation output.Furthermore,this paper analyses the role of external financial dependence in this effect from the two levels of company and industry.Simultaneously,we make the test robustness using substitution of variables and methods.Our empirical findings are:(1)Equity offerings in China's capital market obviously facilitate corporate R&D investment and following innovation output,that is say,equity offerings by listed companies have a significant positive impact on corporate current R&D investment and subsequent innovation output.(2)External financial dependence of both company and industry have a significant positive moderating effect on the relationship between equity offerings and corporate innovation,that is say,corporate external financial dependence can effectively stimulate companies to enhance R&D investment and innovation output through equity offerings.Moreover,this paper explores themediating role of R&D investment in the path of equity offerings on innovation output,and finds that R&D investment plays a full intermediary role in the impact of equity offerings on innovation output.These results show that equity offering is an effective financing channel for listed companies to alleviate the problem of underinvestment in innovative projects,especially for listed companies that are more dependent on external finance.The research in this paper further enriches the analysis of information asymmetry theory,financing constraint theory and principal-agent theory in the field of investment and financing,and conducts new empirical tests and further theoretical analysis in the real decision-making and behavioral phenomena of China's capital market.The research results have certain practical guiding significance for the operation of Chinese enterprises,investor decision-making and government supervision.