Research On The Impact Of Financialization Of Manufacturing Firms On Dual Innovation Performance

The manufacturing industry is the foundation of the country and the source of wealth,and is the embodiment of a country’s comprehensive strength.Since the reform and opening up,China’s manufacturing industry has made remarkable achievements in terms of total economic volume and structural quality,and the added value of China’s manufacturing industry has ranked first in the world for 12 consecutive years,and the output of 220 industrial products has ranked first in the world,further consolidating the status of a large manufacturing country.However,China’s manufacturing industry is generally large but not strong,with a high degree of external dependence on core technologies and key components,and the phenomenon of "the bottom layer is not firm,the middle gap is not strong,and the terminal is not strong".At the same time,along with the rapid development of financialisation,the influence of the financialisation of the economy has gradually spread to the manufacturing sector,leading to the financialisation of manufacturing enterprises,which has greatly crowded out the internal innovation resources of enterprises,weakened their innovation capacity and hindered the healthy development of the manufacturing industry.Based on the differences in innovation objectives,risk-taking and reward methods,innovation can be further subdivided into exploratory innovation and exploitative innovation,and the two have different significance for the transformation and upgrading of manufacturing industries and structural adjustment.Therefore,it is necessary to conduct a detailed study on the relationship between the financialisation of manufacturing enterprises and the performance of dual innovation,so as to better provide the basis for innovation strategies for the development of manufacturing industries and realise the high-quality development of manufacturing industries.Based on the construction of relevant indicators,this paper selects Chinese A-share listed manufacturing companies from 2010-2017 as the research sample,conducts empirical analysis through a suitable econometric model to test the impact of corporate financialisation on exploratory and exploitative innovation,and conducts further extended research based on the results of the main regression by conducting industry segmentation regression,regression on financial asset classification and dual innovation performance non-linear study.On this basis,the mediating paths through which the financialisation of firms affects dual innovation performance are examined,and the moderating role played by equity incentives,the degree of market competition,economic policy uncertainty and government subsidies in this process is explored.Finally,a heterogeneity analysis was conducted to test for betweengroup differences in the sample based on different property rights,technology levels,executive backgrounds,customer concentration and the stage of the life cycle in which they were operating.As a result of these analyses,the following conclusions were drawn:(1)financialisation of manufacturing firms inhibits both exploratory and exploitative innovation performance;(2)financialisation of firms has a more significant inhibitory effect on exploratory innovation performance than exploitative innovation performance.(3)There is an inverted U-shaped non-linear relationship between corporate financialisation and both exploratory and exploitative innovation performance of manufacturing firms;(4)Corporate financialisation suppresses exploratory innovation performance by crowding out R&D investment and stimulating management’s arbitrage incentives;corporate financialisation suppresses exploratory innovation performance by crowding out R&D investment,increasing financing constraints and stimulating management’s arbitrage incentives;and corporate financialisation suppresses exploratory innovation performance by crowding out R&D investment,increasing financing constraints and stimulating management’s arbitrage incentives.(5)Equity incentives and government subsidies have a negative moderating effect on the inhibition between financialization and dual innovation performance of manufacturing firms;market competition and economic policy uncertainty have a positive moderating effect on the inhibition between financialization and dual innovation performance of manufacturing firms;(6)The negative effect of financialization on dual innovation performance of state-owned manufacturing firms is greater than that of non-stateowned firms.The negative effect of corporate financialization on dual innovation performance is greater than that of non-state-owned enterprises;the inhibitory effect of corporate financialization on the innovation efficiency of non-high-tech enterprises is more obvious;manufacturing enterprises with financial background of CEOs can make investment decisions more rationally,mitigating the negative impact of corporate financialization on inhibiting dual innovation activities;for manufacturing enterprises with higher customer concentration,corporate financialization more significantly inhibits dual innovation performance;with the development of enterprises development,the effect of financialisation of manufacturing firms crowding out the efficiency of innovation activities becomes more and more obvious.Based on the research results,the paper concludes with relevant suggestions for promoting the financial industry to return to its original task and better serve the development of the manufacturing industry from the perspective of financialisation of manufacturing enterprises.