Research On The Impact Of R&d Investment And Internal Control On Corporate Financial Performance

In the context of economic globalization,science and technology is the primary productive force and innovation is the primary driver of growth.Scientific and technological innovation is an important way to enhance the competitiveness of enterprises.The automobile industry is the leading and pillar industry in the modern economic growth,but the period of rapid development of the industry has come to an end.The enterprises in this industry are facing the transformation and upgrading of the industrial structure.Considering the deficiencies of independent innovation capacity in Chinese enterprises,they need to increase research and development investment,and output core technology.In the 80 s of the 20 th century,China realized the necessity of enterprise internal control construction,five ministries and commissions in the country jointly issued the Basic Norms of Enterprise Internal Control in 2008.Meanwhile,these organizations continuously perfect the internal control system,gradually introduces supporting guidelines and suggestions for implementation.As a result,a system of the regulations of the internal control is formed.The five elements of internal control play an important role in the management of the enterprises from different perspectives,and give strong support to the sustainable development of them.Generally speaking,the research and development activities of enterprises need a large number of funds and a long cycle.Thus,there is a large risk in such activities.Nevertheless,internal control can provide guarantee for enterprises’ risk prevention and resource allocation,so it can be combined with research and development investment.Based on the above background,this paper has firstly summarized domestic and foreign literature on research and development investment,internal control and financial performance,has defined related concepts,and has introduced the four theories on which the paper is based.Secondly,it has analyzed the status quo of Chinese automobile manufacturing enterprises,research and development investment,internal control and financial status.Thirdly,according to the relevant theories,three research hypotheses have been proposed and four models have been constructed.Finally,the empirical data of A-share automobile manufacturing industry in Shanghai and Shenzhen from 2017 to 2021 have been taken as research samples.Empirical analysis using SPSS27.0 software.The empirical conclusions from the paper are as follows:first,research and development investment has a positive impact on the financial performance of Chinese automobile manufacturing enterprises,but this impact has lag;Second,the higher the quality of internal control of automobile manufacturing enterprises,the stronger the positive impact on financial performance;Third,internal control plays a positive moderating role in the impact of research and development investment on corporate financial performance.According to the research content and empirical results,this paper puts forward the following suggestions: firstly,in terms of research and development investment,it is necessary to increase investment in intelligent and green fields,formulate relevant policies,form talent echelons,and establish diversified financing channels to provide financial support.At the same time,the government should carry out macro-control,strengthen the protection of research and development achievements,and stimulate the creative vitality of enterprises;The second is about internal control.The quality of internal control needs to be improved based on the five elements.The enterprises should manage their research and development activities through internal control system,improve the success rate of research and development projects,and use excess earnings to improve the financial performance of enterprises.To improve the financial performance through R & D and management.