Study On The Economic Consequences Of Identification Of High-tech Enterprises

Innovation is the essentialpower of enterprises'sustainable development,and can create high monopoly profits for enterprises and maintain sustainable economic growth(Solow,1956).However,due to the nature of positive externalities of public goods of enterprise'innovation,enterprises undertake all the cost of innovation but can not possess all the earnings of innovation alone,which results in that enterprise' innovation investment is lower than investment of the social optimum level.So it is necessary for government to intervene enterprise'innovation to maximize the social welfare(Arrow,1962).In fact,due to the rising international competition of science and technology in recent years, all countries in the world have taken measures to stimulate enterprise'innovation,such as tax incentives,government subsidies and financing facilities,and achieved fruitful performance(OECD,2011).Chinese government has begun to issue the policy of identification of high-tech enterprises since 1991,and took fiscal,tax,financial and many other measures to stimulate enterprise'innovation at the same time.In 2008 Chinese government has begun to identify high-tech enterprises,carry out tax incentives,unify identified standards and specify operating procedure on a national scale.In 2016 Chinese government has amended the policy of identification of high-tech enterprises again,further lowered the identified standards and increased the identified scale of middle and small-sized enterprises.Although the innovation investment of Chinese enterprises have increased step by step in nealy twenty years,it is still inferior to the innovation investment and performance of enterprises in developed countries and some Asian countries in the world,which result in restricting the improvement of Chinese enterprises'independent innovation ability and upgrading of the industrial structure.Therefore,it is practical significantly to discuss the economic consequences of identification of high-tech enterprises for incentiving enterprises to increase innovation investment and improve performance and realizing the goal of building an innovation-originated nation.This dissertation investigates the effect of identification of high-tech enterprises on enterprises'innovation from three aspects:firstly,this dissertation investigates the incentive effect of identification of high-tech enterprises on enterprises'innovation, and further analyzes the difference of the incentive effect under different institutional environment;secondly,this dissertation investigates the effect of identification of high-tech enterprises on enterprises'financial peformance,and further analyzes the mechanism of action of identification of high-tech enterprises on enterprises' financial peformance;thirdly,this dissertation investigates the market reaction to announcements of identification of high-tech enterprises and analyses the effect of identification of high-tech enterprises on enterprises'stockprice.After reviewing and summarizing the relevant theories and literatures about the economic consequences of government interventing enterprises'innovation and about the economic consequences of enterprises'innovation, this dissertation firstly analyzes theoretially the effect of identification of high-tech enterprises on enterprises' innovation and financial performance and stock price.Then this dissertation takes empirical tests using samples of Chinese A-share high-tech listing companies during 2005 to 2014.The study of this dissertation draws the three following conclusions:Firstly,this dissertationanalyzes the incentive effect of the identification of high-tech enterprises on the enterprises'innovation,and the different incentive effect under different institutional environment.Empirical results find that the identification of high-tech enterprises significantly incentives the enterprises'innovation.This innovation incentive effect is more significant particularly in areas with more government intervention,lower level of property rights protection,lower level of financial development and lower level of intermediary organization development. These findings show that as a formal institution,the identification of high-tech enterprises contributes to ease the backward system obstacle for enterprises' innovation,can help enterprises to gain innovation resources,and then incentive enterprises'innovation.Secondly,this dissertationexamines the effect of enterprises'innovation and tax incentives on the relationship of identification of high-tech enterprises and enterprises' financial performance.Test results show that,enterprises'innovation and tax incentives mediate partly and significantly the effect of identification of high-tech enterprises on enterprises'financial performance.The total mediated effect is 0.0029.Enterprises' innovation and tax incentives partly and indepently mediate the effect of identification of high-tech enterprises on enterprises'financial performance,and the partial mediated effect of tax incentives is significantly higher than that of enterprises' innovation. At the same time,the direct effect of identification of high-tech enterprises on enterprises'financial performance is significant,which is 0.0153.These findings show that the identification of high-tech enterprises promotes enterprises'financial performance to improve through two paths,which is the direct effect path of identification of high-tech enterprises on enterprises'financial performance through helping enterprisesto acquire resources and avoid business risk,and the indrect effect path of identification of high-tech enterprises on enterprises'financial performance through the mediated effect of enterprises'innovation and tax incentives.The indrect effect is lower than the direct effect.Thirdly,this dissertationfirstly explores the market reaction of announcements of identification of high-tech enterprises by using the event study method.Test results show that,on the announcements day the market reaction is negative but not significant.There are no enough evidence to prove that investors price higher to the identification of high-tech enterprises of listed companies.Further tests find that during the period of announcements of identification of high-tech enterprises,relative to control groups,the market reactions are worse of middle and small enterprises,private enterprises and enterprises certificated newly after 2008.These findings show that investors expect after identification of high-tech enterprises,these enterprises will be mandated to increase R&D by policy requirements,which will sharpen the funds difficulty of these enterprises,and will lead to major financial risk and business risk in a short time.Therefore there are abnormal fluctuations of stock prices of these enterprises.As a whole,this dissertation has not find that evidence which can support that investors price higher to the identification of high-tech enterprises of listed companies, but the capital market really regards the identification of high-tech enterprises of listed companies as information related to enterprises' value.These results show that because of the imperfection of capital market and the short-sighted action of investors, investors fail to assess reasonably the value of enterprises'innovation,which reflects to a certain degree that the power of capital market to support enterprises to become the main body of independent innovation is insufficient.As a whole,this dissertation studies the effect of the identification of high-tech enterprises on enterprises'innovation,enterprises'financial performance and stockprice.Tests find that the identification of high-tech enterprises stimulate enterprises'innovationand improve enterprises'financial performance effectively,and enterprises'innovation and tax incentives partly mediate the effect of identification of high-tech enterprises on enterprises'financial performance,which means that the policy of identification of high-tech enterprises is scientific and reasonable.But because of the imperfection of capital market and the short-sighted action of investors,investors do not price higher to the identification of high-tech enterprises of listed companies,which reflects that capital market can not yet support effectively enterprises to become the main body of independent innovation.Therefore,this dissertation thinks government must strengthen the building of institutional environment and capital market and construct environmental atmosphere in favor of enterprises'innovation in order to give fully play to the effect of innovation incentive and financial performance of the policy of identification of high-tech enterprises,which will facilitate enterprises to acquire more innovation resource from outside to improve the ability of independent innovation and performance.It will be conductive to accelerating to improve the science and technology competitiveness of our country and realizi the strategic goals of building innovation-oriented country.