Legal Environment,Financing Structure And Enterprise Technological Innovation

Science and technology are a primary productive force,and innovation is the source of the power of scientific and technological development.Under the background of promoting the strategy of "innovation-driven development" and the comprehensive rule of law in China,how to use the rule of law tools to empower enterprises’ technological innovation has become an issue worthy of attention.At the same time,under the background of promoting the establishment of multi-level capital market in China,it is of great theoretical and practical significance to use the rule of law tools to carry out financial reform and give better play to the function of capital market to drive innovation and support the real economy.Through the review of domestic and foreign literature,it is found that there are few studies on the relationship between legal environment,financing structure and enterprise technological innovation.Therefore,the article discusses and tests the relationship among the three.This paper selects the data of China’s A-share listed companies from 2008 to 2020 as samples,and establishes a regression model for research.First,this paper analyzes the evolution and connotation of the rule of law in detail,analyzes the relationship between the rule of law environment and enterprise technological innovation through the theory of property rights and principal-agent theory,and finds that a good rule of law environment can promote enterprise technological innovation by using the model（3-1）.Next,this paper also analyzes the relationship between the legal environment and financing structure through the theory of "law and finance",and finds that the legal environment affects the financing structure by using the model（3-2）.Then,starting from the financing theory,the relationship among the legal environment,financing structure and enterprise technological innovation is analyzed,that is,the way of financing structure acting on the legal environment and enterprise technological innovation.On the basis of Model（3-2）,the mediating effect of financing structure is verified by model（3-3）.It is found that internal financing,debt financing and commercial credit financing play a part of mediating effect in the influence of legal environment on enterprise technological innovation.Equity financing plays a hiding effect in the influence of regional legal environment on enterprise technological innovation.After using instrumental variables to solve endogeneity,changing indicators,shortening the time window and changing the model for robustness tests,the main conclusions still hold.The mechanism test shows that the mediating effect of financing structure between legal environment and technological innovation is mainly reflected in exploratory innovation,but not in exploitative innovation.The heterogeneity analysis shows that the difference between stateowned enterprises and non-state-owned enterprises is reflected in the internal financing and creditor’s right financing.The internal financing plays a hiding effect in the legal environment on the technological innovation of state-owned enterprises,while the intermediary effect of creditor’s right financing is not established in the state-owned enterprises.Among enterprises with different levels of internal control,the mediating effect of internal financing does not exist in enterprises with higher levels of internal control.Among enterprises with different human capital levels,the mediating effect of endogenous financing does not exist in enterprises with high human capital.Based on the empirical results,this paper recommended that the government should promote financial reform to construct multi-level capital market by using the rule of law,improve the precision of monetary policy and create a good social credit environment,promotes the transformation of government functions by using the rule of law and strikes a balance between law and policy,coordinates the law-based governance strategy and soe reform to promote high-quality development of enterprises and increase their profitability.