Influence Of Investor Sentiment In Stock Market On Enterprise Innovation

Innovation is the first driving force for development.Research on corporate innovation behavior become popular with extensive related literature in the situation of innovation-driven development.Performance of financial market tends to influence real economy with the growing influence of finance.Deviation between stock price and intrinsic value of corporate caused by irrational behavior of investors shapes corporate innovation decision.Therefore,it’s of great necessary to conduct research on whether and how investor sentiment influences corporate innovation behavior.Based on previous theoretical analysis frameworks on investor sentiment and corporate investment behavior,this thesis put forward three possible channels through which investor sentiment affects corporate R&D investment:equity financing channels,managers’ catering channels,and managers’ optimism channels.The equity financing channel means that positive investor sentiment increases the R&D investment of the enterprise by reducing the cost of equity financing;the manager catering channel means that in order to maximizing personal interests,managers maintain the positive investor sentiment by increasing R&D investment;managers’ optimism channel means that positive investor sentiment affects managers’ beliefs,makes them be optimistic,and expands the scale of R&D investment.The equity financing channel and the managerial catering channel assume that managers are perfectly rational,while the managerial optimism channel assumes that managers are boundedly rational.This thesis argues that in the face of irrational investor sentiment,there are both rational and irrational factors which influence managers.The three channels take effect at the same time.In order to verify the theory,this thesis selects three mechanism variables for regression:equity financing dependence,CEO equity incentive degree and managerial optimism.This thesis draws the following results after empirical analysis:First,positive investor sentiment significantly motivates companies to increase R&D investment,and equity financing channels,managers’ catering channels,and managers’optimism channels play a role at the same time.Secondly,instead of invalid input,positive investor sentiment significantly improves the level of corporate innovation output.Based on the results,this thesis makes three suggestions:At first,the company’s shareholders can link the manager’s personal remuneration to the company’s value by implementing managerial equity incentives,which is conducive to solving the principal-agent problem and increasing R&D investment to improve the company’s longterm value.Secondly,it is necessary for investors to maintain rational,improve professionality,learn to judge the intrinsic value of enterprises,and do not blindly follow the trend,so as not to hurt the innovative decision-making of enterprises.Thirdly,regulatory agencies should establish a standardized market management mechanism and improve the information disclosure system of listed companies.