The Impact Of Stock Liquidity On Firm Breakthrough Innovation

since the 18 th National Congress of the Communist Party of China,China has smoothly entered the ranks of innovative countries,and the number of high-tech enterprises in the country has increased from 49,000 to more than 330,000.However,for a long time,Chinese enterprises are still mainly through learning and introducing advanced technologies from developed countries,transforming and upgrading them,and reusing progressive innovation,and the problem of "stuck neck" of key core technologies still exists.In this complex and ever-changing domestic and international environment,how to encourage enterprises to break the original innovation model and encourage enterprises to "open up new ways" to open up new development fields has become a common concern of scholars.While the capital market is an important market for enterprises to carry out external financing and obtain effective demand funds,the continuous development of the economy brings about the increasing maturity of the capital market,we should consider how to improve the efficiency of capital market allocation,so that funds flow to enterprises that can create more practical value for the society,so as to inject "fresh blood" into the breakthrough innovation of enterprises,and constantly promote China’s enterprises to achieve a qualitative leap from technology introduction,to technology imitation to independent innovation.This topic of combining capital markets with corporate innovation needs further research.Therefore,this paper summarizes the research results of predecessors,combs the literature through the main variables,combines the sound-exit mechanism,known and unknown information and agency problem for theoretical analysis,selects qualified listed companies in China as research samples,studies the impact of stock liquidity on enterprise innovation and enterprise breakthrough innovation,and then analyzes the heterogeneity of enterprise ownership and industry differences.At the same time,the shareholding ratio of institutional investors is included in the research framework to study the role of stock liquidity on the breakthrough innovation of enterprises,and form a complete framework system for the research on this issue.The results show that stock liquidity has a positive effect on enterprise innovation,but significantly inhibits enterprise breakthrough innovation,which may be due to the high degree of information transparency and the regulatory role of shareholders on the one hand,which has a certain inhibitory effect on the short-sighted behavior of enterprise managers,so that managers respond to the supervision of all parties by increasing innovation.But at the same time,the continuous improvement of liquidity,so that shareholders can freely buy and sell stocks,shareholders themselves pursue the maximization of their own interests,once heard any negative information will bring stock price fluctuations,and even crash risk,so managers will choose to reduce more "radical" breakthrough innovation,seek stable development.In this paper,the replacement variable and the PSM-DID model are introduced in the robustness test to exclude the influence of endogeneity and selectivity error on the experimental results,and the experimental results are robust.In addition,the institutional investors introduced in the mechanism of action have played a part of the intermediary role in this path,indicating that the increase in the shareholding ratio of institutional investors has a certain warning effect on enterprise managers,so that they can consider factors such as stabilizing stock prices,and then reduce the breakthrough innovation of enterprises.The research results in this paper have practical significance for the governance of listed companies and the development of capital market.The main innovation points of this paper are as follows: first,this study focuses on the breakthrough innovation of enterprises and extends the relevant research content between stock liquidity and enterprise innovation;Second,it tests the existence of the mechanism of institutional investors,and expands the role path of stock liquidity and enterprise breakthrough innovation;Third,it constructs indicators such as technology proximity and known areas to improve the measurement method of breakthrough innovation.