Study On The Impact Of Financial Distortions And Equity Incentive On Enterprise Innovation Investment

The “Made in China 2025” report issued by the State Council in 2015 puts forward innovative R&D requirements for the development of China's manufacturing industry.Although there are already a number of enterprises in China that have continuously improved their R&D capabilities,SMEs generally lack sufficient R&D.Funds to promote technology updates and business transformation.The investment in R&D of enterprises is closely related to the value of enterprises.The injection of R&D funds will bring about technological advancement of enterprises and directly improve the competitiveness of products,which will help enterprises to occupy a dominant position in the future competitive market and play an important role in their long-term development.Chinese enterprises,especially private enterprises,have become one of the mainstays of technological innovation.However,compared with large state-owned enterprises,small and medium-sized private enterprises are more likely to be exposed to external market risks.In the case of distortions in the financial market,these enterprises are more difficult to match the appropriate credit resources.In terms of internal management and corporate governance,in order to improve operational efficiency and reduce agency costs,modern enterprises have generally adopted equity incentive policies to promote the convergence of executive teams andshareholders,reduce short-sighted behavior,invest funds in projects that are conducive to the company's long-term development,and maximize corporate value.Compared with other industries,high-tech enterprises need more R&D funds to maintain their development advantages.However,when the development of external financial markets is not perfect and the allocation of financial factors is distorted,these enterprises generally face financing constraints,and the company implements internal equity incentives.Whether the policy is still reliable and whether it can still play a role in positively guiding R&D investment remains to be confirmed.Based on this consideration,this paper will mainly study the relationship between financial distortion,equity incentive and enterprise innovation investment.Based on this,this paper proposes the following three hypotheses: 1.The reduction of the financial distortion promotes the growth of innovation investment of high-tech enterprises;2.The correlation between equity incentives and R&D investment is positive;3.The existence of equity incentives weakens the inhibitory effect of financial factor allocation distortion on corporate innovation investment.In order to verify the above three conjectures,on the basis of combing domestic and foreign research and related theories,this paper screened 103 high-tech enterprises in A-share listed companies,and used their 2008-2017 data to conduct empirical tests to find high-tech.Enterprise innovation R&D investment is negatively correlated with the distortion level of financial factor allocation,and is positively correlated with the intensity of equity incentives,and the existence of equity incentives weakens the inhibitory effect of financial factor allocation distortion on corporate innovation investment.Re-verify the hypothesis when regionally dividing all sample data and conducting sub-sample empirical tests,and find that the distortion of financial element allocation in the eastern region has less inhibitory effect on corporate R&D investment than other regions,and the promotion effect of internal equity incentives is stronger than other regions.Based on the above conclusions,in order to comprehensively improve the level of innovation in China,enterprises should optimize the corporate governance system and establish a sound internal incentive mechanism,the state should actively improvethe external market environment and improve the marketization level of resources allocation.Only under the conditions of friendly external environment and sound internal system can China's high-tech enterprises increase their R&D intensity,enhance their innovation level and enhance their international competitiveness.