The Influence Of Equity Pledge Financing On Technological Innovation Of Enterprises

Equity pledge financing plays an important role in enterprise technological innovation.However,the literature on its impact on enterprise technological innovation only stays in the capital of innovation investment,but there is no research on technological innovation achievements.With the 14 th Five-Year plan of the Party,to achieve economic transformation,change the impetus of economic growth,and realize the concept of sustainable development.Therefore,Premier Li Keqiang strongly advocates the strategy of "mass entrepreneurship and innovation" to promote technological innovation and development of enterprises.Listed companies are the most active subjects in the capital market,and many listed companies carry out equity pledge financing to carry out technological innovation.Therefore,equity pledge financing plays a very important role.How does it play its role? To answer this question,it is necessary to conduct in-depth research on how equity pledge financing affects enterprise technological innovation.This paper aims to answer the following questions:(1)How does equity pledge financing affect enterprise technological innovation?(2)Through what mechanism does equity pledge financing affect technological innovation?What measures do the government and enterprises take to influence the effect of technological innovation?Taking equity pledge behavior as the research object,this paper systematically tests the influence of equity pledge financing on enterprise technological innovation by combining equity pledge database(2010-2021)and unique China Green patent database(2000-2020),using the fixed effect model,and using the fixed effect of industry,firm and time.The inhibitory effect was verified.Since The State Council implemented the policy of "mass entrepreneurship and innovation",the academic research on the behavior and consequences of equity pledge has changed.This paper conducts an in-depth analysis from the perspective of the type of enterprises(industrial technology level)and the behavior of shareholders(insurance,pledge times and refinancing)through the heterogeneity analysis.This paper further empirically tests the internal mechanism of equity pledge financing to inhibit technological innovation from four aspects: financing constraint,financing cost,agency cost and information transmission,providing evidence for the government,shareholders and management.Based on the empirical results,the following four main conclusions can be drawn:(1)Equity pledge financing suppresses enterprise technological innovation,including general patent,invention patent,utility model patent and design patent.This conclusion is still valid through a series of robustness tests,such as changing the explained variable and instrumental variable method.(2)From the perspective of the heterogeneity of the enterprise’s industrial technology level type,after equity pledge financing,if the enterprise is at the high-tech industrial level,the enterprise’s technological innovation will be inhibited;if the enterprise is at the low and medium technology industrial level,the enterprise’s technological innovation will not have a significant effect;(3)From the perspective of behavioral heterogeneity of equity pledge,after equity pledge financing,if shareholders carry out high liability insurance for investment supervision,the inhibitions on enterprise technological innovation will be weakened;If shareholders pledge many times,the heterogeneity of technological innovation will be enhanced.If shareholders refinance,the inhibitions on technological innovation of enterprises will be weakened,but the risks of enterprises will be increased.(4)The inhibitory effect of equity pledge on technological innovation of enterprises is due to the intensification of financing constraints,the increase of financing cost and agency cost,and the increase of analysts’ attention,which reveals the internal motivation of equity pledge financing affecting technological innovation.The marginal contribution of this paper is mainly reflected in the following two aspects:(1)In terms of indicator measurement,based on Chinese patent data and starting from the types of patents,this paper measures the technological innovation of enterprises,so as to measure the effect of technological innovation more accurately and systematically.(2)In theory,first of all,through the study of the types of enterprises and other behaviors of shareholders after pledge,different characteristics and different behaviors of shareholders will have different effects on enterprise technological innovation.Secondly,through the mechanism of analyzing how equity pledge financing affects the technology types of enterprises,it provides empirical support for the government and management to manage enterprises and promote their technological innovation.This paper provides theoretical support and systematic empirical evidence for equity pledge financing and its technological innovation,and provides important decision-making reference for promoting high-quality development of enterprises in the new era.