Study On The Impact Of Gree Electric Financial Flexibility On Technological Innovation

General Secretary Xi Jinping pointed out in the report of the 20 th Party Congress that "we must adhere to science and technology as the first productive force,talent as the first resource and innovation as the first driving force,and constantly shape new momentum and advantages for development." As an important force in promoting the high-quality development of China’s economy,enterprises need to effectively improve their technological innovation capabilities and drive their development with technological innovation.However,under the increasingly fierce market competition,enterprises face many challenges in technological innovation.The high-risk nature of R&D activities,the uncertainty of R&D results and the long R&D cycle have become challenges for enterprises to carry out technological innovation.As a result,innovation activities are highly dependent on the business situation of the enterprise.As an important financial management strategy,financial flexibility provides sufficient monetary resources and a continuous cash flow to ensure the smooth implementation of technological research and development activities.At the same time,financial flexibility can effectively play a buffering role against external risks,helping enterprises to seize investment opportunities in technological innovation and improve their technological innovation capabilities.Therefore,how to give full play to the positive role of financial flexibility is important for enterprises to improve their technological innovation capabilities.This paper compares the existing literature on financial flexibility and corporate technological innovation,summarises the research results of scholars at home and abroad,and uses Gree Electric as a case study object based on principal-agent theory,optimal financing theory,innovation theory and incomplete information theory to develop this paper’s analysis and research on corporate financial flexibility and technological innovation.Firstly,the current situation of financial flexibility and technological innovation of Gree Electric is analysed,and then the mechanism of influence of financial flexibility on technological innovation of Gree Electric is sorted out.Then,an evaluation system of enterprise innovation capability was constructed,and the entropy value method was used to analyse the technological innovation capability of the enterprise,and a comprehensive evaluation and scoring of the technological innovation capability of Gree Electric was conducted.Finally,based on the evaluation results of technological innovation,a grey correlation model was used to measure and analyse the impact of Gree’s financial flexibility on technological innovation.The study of Gree Electric’s financial flexibility and the firm’s technological innovation capability found that,firstly,Gree Electric has excellent technological innovation capability performance and has the highest technological innovation capability score and the best technological innovation capability performance in 2019.Second,GREE can have a positive effect on corporate technological innovation by providing R&D funding for the enterprise through holding a large amount of disposable monetary funds,mitigating corporate operating risks and increasing the enterprise’s access to external investment by maintaining high-quality liabilities,and stimulating the initiative of R&D personnel through the implementation of equity incentive policies.Thirdly,GREE’s cash flexibility,debt flexibility and equity flexibility all have a positive impact on technological innovation,with debt flexibility having the strongest correlation with technological innovation.After reviewing the findings of this paper,this paper puts forward several suggestions in terms of scientific reserve of financial flexibility and providing corporate technological innovation capability.