How R&D Innovation Affects Enterprise Total Factor Productivity

In the past 40 years of reform and opening up,the economy of China is developing rapidly,but behind the rapid economic development is the huge investment in productive factors.With the disappearance of the demographic dividend and the exhaustion of resources,China is bound to face the transformation of economic development.However,since the 19th National Congress of the Communist Party of China proposed to increase total factor productivity,research on the relationship between R&D investment and total factor productivity has not been clear.Many empirical studies based on China show that R&D investment has not significantly promoted total factor productivity.It is necessary to deeply explore the relationship between R&D and total factor productivity.Theoretical analysis shows that the relationship between R&D investment and the total factors of the enterprise is likely to be affected by external factors.The influence from the market and the government will cause structural mutations in this relationship,which means that there may be a threshold effect.To test this hypothesis,Using the panel data of domestic A-share listed manufacturing companies from 2013 to 2019,we constructed a dynamic panel model,a regulatory effect model,and a threshold panel model.According to empirical analysis,we get these views:First,the negative impact of capital resources occupied by R&D investment on total factor productivity may be greater than the positive impact it brings.Only when R&D investment is truly transformed into patent output can its positive effect on the level of total factor productivity.Second,the degree of marketization and government subsidies have significantly adjustment effects on the relationship between R&D investment and enterprise total factor productivity are different.Marketization has shown a positive adjustment effect,while government subsidies have shown a negative effect.Third,further testing confirmed that there is a single-threshold effect.Only when the degree of marketization exceeds the threshold,R&D investment can significantly promote the improvement of enterprise’s total factor productivity,while government subsidies are on the contrary.When the threshold is exceeded,R&D investment cannot increase the enterprise’s total factor productivity.On the contrary,will have an inhibitory effect,and only within the threshold can it show an obvious promotion effect.In general,companies should increase R&D investment,pay attention to the output rate of R&D,and choose R&D direction reasonably according to their own internal conditions;the government can take corresponding measures according to the actual situation,improve the development of the local factor market,and promote the optimization of the business environment.Instead of simply incentivizing enterprises to conduct research and development,government subsidies should be controlled within a certain range,and attention should be paid to the main role of the market in competition and resource allocation.