On The Technological Innovation Of Enterprises By Banking Competition

The "14th Five-Year Plan" points out that "we should persist in the key position of innovation in China’s overall modernization drive." It is an important cornerstone and core force in scientific and technological innovation within enterprises of China.It could be seen that technological innovation of enterprises is the key support for China to promote the formation of a powerful country with science and technology.Technological innovation can’t be separated from capital investment,but because of such realistic factors as unstable risk,uncertain cycle and asymmetric information,enterprises’ technological innovation is often faced with the problem of external credit financing.As banks still have the primary leading advantage in China’s financial market,bank credit financing is still one of the critical sources in funds for enterprises to promote technology development.With China’s banking industry entering a new historical period,the banking competition has gradually raised.Therefore,analyzing the influence of banking competition on enterprise technological innovation is helpful to further enrich the academic achievements in this direction,which has research value and significance.There are five parts of this specific research steps: The first part firstly tells the research background of this paper,and then describes the research purpose and meaning of this paper.Secondly,from the two aspects of banking competition and credit financing,this paper sorts out the existing academic documents both at home and abroad that affect the technological innovation of enterprises,and then sums up the relevant research literature,and makes a literature review.The second part describes the core concepts of banking competition and enterprise technological innovation.Then it analyzes its development process and present situation.The third part combs the related classical theories such as financing priority theory.It further analyzes the effects of information hypothesis and market power hypothesis on how banking competition affects the technological innovation of enterprises,and the intermediary effects of financing constraints and financing costs as transmission channels between them,so as to put forward corresponding research hypotheses.The fourth part makes empirical analysis,and constructs Herfindal Index(HHI)to calculate the competition degree of the banking industry.Using entropy method,this paper comprehensively measures the technological innovation of enterprises from four dimensions of the whole process of innovation: input,achievement,operation and environment.Using the micro-data from 2010 to 2020,this paper comes to an empirical analysis of critical impacts of banking competition on technological innovation of enterprises.Then,according to different regions,the heterogeneity analysis of the eastern regions,the central regions and the western regions and the heterogeneity analysis according to the nature of enterprise property rights,as well as the robustness test.Finally,the intermediary effect of financing constraints and financing costs as intermediary variables is discussed.The conclusions of this essay are listed as follows:(1)Intensified competition in the banking industry can effectively promote technological innovation of enterprises.(2)The eastern region has the strongest promoting effect.(3)Compared with state-owned enterprises,non-state-owned enterprises have achieved a better positive impact.(4)In the process of transmission,it plays an indirect role in promoting technological innovation of enterprises through the intermediary effect of financing constraints and financing costs.That is to say,the improvement of banking competition can alleviate the external credit financing constraints and decrease the cost of credit financing,thus promoting technological innovation of enterprises.Therefore,this paper considers that the reform of the banking market should be further deepened in order to support the technological innovation of companies and to promote economic growth and technological progress.The possible innovations of this article are listed as follows:(1)Exponential method is used to construct explained variables and explanatory variables.For banking competition,this paper constructs HHI index to measure it.As for the technological innovation of enterprises,this paper uses entropy method to comprehensively measure the technological innovation of enterprises from four dimensions: investment,achievement,operation and environment,and adopts a number of measurement indicators such as the proportion of R&D investment,the proportion of technical personnel and the application for invention patents.This will make the empirical research of this paper more robust and reliable.(2)From the perspective of financing constraints and financing costs,this paper discusses the transmission mechanism between them.It is hoped that by further clarifying the transmission channels through which the banking competition affects the technological innovation of enterprises,the existing academic achievements can be supplemented.(3)On the research object,this paper selects the latest data from 2010 to 2020 to make the research results of enterprise technological innovation more in line with the current reality.(4)In the robustness test,this paper uses the data of listed companies in the New Third Board to test,which can further improve and deepen the analysis of this paper from the perspective of SMEs.