Institutional Environment And Enterprise Innovation Investment

Innovation is an important driving force for a country's stable and rapid economic development.In recent years,China's innovation activities have maintained a growing trend.In order to meet the challenge from the innovation advantages of developed countries,the report of the 19th National Congress of the Communist Party of China proposed to "accelerate the building of an innovation-oriented country","strengthen the construction of the national innovation system" and "become one of the forefront of innovation-oriented countries by 2035,improve systems in all aspects,basically realize the modernization of China's governance system and governance capacity,and gradually complete the strategic arrangement for the development of Chinese socialism in the new era".The mission calls for responsibility,and the mission guides the future.China's government,after joining the WTO in 2001,formulated many policies to encourage innovation,such as carrying out the national patent application promotion project and outlining the national intellectual property strategy framework.To improve the capacity for independent innovation,the governments in China at all levels have adopted supportive policies for enterprises in different dimensions.But as a matter of fact,compared with the developed countries,China's innovation capability is still at the low level.Along with the worldwide weak economic recovery and rising trade protectionism,the downward pressure for China's economy continues to increase.Therefore,it has become increasingly significant to facilitate the institutional environment construction,to alter the government functioning,as well as to accelerate the science and technology innovation to form the national core competitiveness.As an important subject of innovation,enterprises influence the decision-making and strategy of innovation input.The institutional environment influences and standardizes the individual and industrial behaviors to a certain extent.The innovation behaviors of enterprises are carried out in a certain institutional environment,and their behaviors are inevitably affected by the external institutional environment such as economy,politics and law.Through relevant literature review at home and abroad,it is found that there is a lack of literature on research that integrates macroeconomic policies into the impact of institutional quality on enterprise innovation input.Few existing literature studies the differences of enterprise innovation input in different enterprise life cycles under the interaction between institutional quality and macro-economy.The existing theoretical studies analyze the enterprise innovation behaviors within the enterprise level and from merger and acquisition,and embed the external monetary policy and fiscal policy into the analysis framework respectively.In spite of this,there are still some deficiencies in the existing researches.For example,up to now,no complete theoretical system has been formed and more studies have been conducted from the inside of enterprises,or from a single perspective of the impact of fiscal policy or monetary policy on enterprise innovation input.So,there is still a lack of experience of incorporating China's institutional quality into the analysis framework.On the basis of the theory of institutional economics,this paper takes the quality of regional institutions as the entry point and studies the effectiveness of institutional improvement in promoting enterprise innovation investment.On the basis of comprehensively sorting out the relevant theories and research results,this paper systematically investigates and empirically analyzes the effect of local government on enterprise innovation in improving the institutional environment from the perspective of enterprise innovation investment.The research mainly includes the following perpectives.First,it studies the influence of enterprise characteristic factors on enterprise innovation.Secondly,it discusses the stimulating effect of institutional quality improvement on enterprise innovation investment.Thirdly,the effect of monetary policy as a moderator variable on enterprise innovation investment is studied in depth,providing a theoretical basis for local governments to stimulate enterprise innovation activities under different monetary policies.Fourthly,it tests whether the fiscal policy can effectively stimulate the innovation investment of enterprises as the regulating variable,and provides the theoretical basis for local governments to implement the fiscal subsidy under the condition of improving its institutional quality.Based on institutional theory,enterprise financing and investment theory and public interest theory,this paper introduces monetary policy and fiscal policy as regulating variables to explore the mechanism of institutional quality on enterprise innovation investment.In this paper,the fiscal and monetary factors are incorporated into the measurement framework by using the marketization index as the referential index of institutional quality and the macro-economic data at the provincial level.The research conclusions based on empirical research in this paper include at least the following three points.First,the promotion of the marketization process has a promoting effect on enterprise innovation.When the institutional quality is high as measured by its location in a given district,the market allocation function plays a greater role in promoting the innovation investment of enterprises.When the institutional quality is low,the market allocation function plays a smaller role in promoting the innovation investment of enterprises.Second,monetary policy has a significant impact on enterprise innovation through financing constraints.With the change of policy environment,tight monetary policy will inhibit the promotion effect of institutional quality on enterprise innovation.The loose monetary policy will intensify the promotion effect of institutional quality on enterprise innovation.Thirdly,financial subsidies can promote the innovation investment of enterprises through signal transmission.When the institututional quality is high,the government subsidy can relieve the external financing constraints of enterprises through signal transmission.When the institututional quality is low,the government subsidy supports the innovation investment of enterprises through external financing channels.From the perspective of empirical research,for developing countries and countries in transition,the refinement of institutional quality is an important factor affecting the smooth transformation.Improving institutional quality will give full play to policy advantages and bring innovation vitality and market advantages into play,which is particularly important for China in the stage of development transition.However,at present,empirical studies on the effect of institutional quality on enterprise innovation investment are mainly concentrated in developed countries,while few studies on developing countries and these studies are lack comprehensive consideration of the macro environment.How to combine the theory of institutional economics and monetary theory with the innovation input of Chinese enterprises and construct an empirical analysis framework to explain the quality of Chinese institutions and the impact of economic policies on the innovation input of Chinese enterprises is an urgent problem to be addressed.Therefore,this paper studies the impact of China's institutional quality and economic policies on the innovation input of Chinese enterprises through theoretical and empirical research methods.This paper is mainly divided into the following seven parts.The first chapter is the introduction,which focuses on the research background,research significance,research methods and innovation points.The second chapter is the theoretical analysis and literature review.Firstly,the relevant theories are introduced and sorted out,which lays the research foundation for the next part of the study.Secondly,the mechanism analysis and comprehensive analysis are carried out from different perspectives.At last,the paper analyzes the enterprise innovation investment by constructing a simple theoretical model.The third chapter studies the influence of institutional quality on enterprise innovation investment and tests the positive role of institutional quality improvement in improving enterprise innovation environment.The forth chapter is the influence of fiscal policy and institutional quality on enterprise innovation.Based on the theory of government intervention,the influence of institutional quality on enterprise innovation under government subsidies is tested.The fifth chapter studies the influence of monetary policy and institutional quality on enterprise innovation.Based on the monetary transmission theory,it tests the influence of institutional quality on enterprise innovation under the condition of monetary policy tightening.The sixth chapter is about the influence of economic policies and institutional quality on enterprise innovation,and comprehensively considers the influence of monetary policies,fiscal policies and institutional environment on enterprise innovation.The last chapter is the conclusion.The limitations,future research directions and policy implications of this study are analyzed in this section.Based on the conclusions,this paper puts forward policy suggestions with the following practical significance.Firstly,it is conducive to the government to reasonably subsidize enterprises according to their growth cycle,and adjust accordingly to the macroeconomic policies,so as to provide impetus for enterprises' innovation and thus improve their value.Secondly,is useful for monetary policy makers to study and evaluate the current development strategy of national strategic industries,formulate policies in line with the strategies,and create a good innovation environment for enterprises.Thirdly,it helps enterprises to optimize capital allocation and realize sustainable development by understanding industrial policies and macroeconomic policies.Compared with the existing studies,the innovation of this paper lies in the research on the macro-control role of macroeconomic policy and institutional quality in the economy,and the exploration of the interaction between the two and their influence on enterprise innovation investment behavior,in the following specific perspectives.On the one hand,it is different from the previous literature to study the relationship between a single economic policy and enterprise innovation input.This paper analyzes and discusses fiscal policy,monetary policy and institutional quality in a unified theoretical analysis framework.This paper discusses the influence of fiscal policy and monetary policy,which are the components of macroeconomic policy,on the innovation investment of enterprises.With the background of improving institutional quality,fiscal policy as the entry point from macro perspective,monetary policy adjustment as the link,this paper take a further step to carry out the analysis on the innovation behavior of enterprises.Moreover,the analysis framework of national innovation system construction is also discussed from a more comprehensive and realistic perspective.One the other hand,since there has been a lack of analysis on the influence of the interaction of economic policies and institutional quality on enterprise innovation investment from the perspective of enterprise life cycle in existing studies,and there lacks a comprehensive empirical study of their impact on enterprise innovation investment.Based on the theory of institutional economics and the theory of corporate finance and investment,this paper classifies the enterprise life cycle based on the perspective of enterprise cash flow statement financing,and discusses the impact of institutional quality on enterprise innovation investment under different fiscal and monetary policy backrounds.Lastly,the existing empirical research about enterprise innovation investment often neglects the integrative influence of monetary policy and institutional quality.Based on the new institutional economics theory,enterprise financing and investment theory,this study analyzes the changes of institutional environment on enterprise innovation investment under the background of different fiscal policies and monetary policies.