Financial Development, Corporate Innovation And Economic Growth

Innovation is the fundamental factor for enterprises to maintain sustainable competitiveness,and also the guarantee for a country's long-term economic prosperity.Especially after China's economy entered the "new normal",the government proposed "mass entrepreneurship,mass innovation",and technological innovation has become one of the main driving forces of economic growth.The 2019 government work report emphasiz es the effective support role of the financial market in the process of economic development.How to drive China's economy to achieve substantial and stable growth with innovation and guide the precise inflow of funds into the real economic sector for precise docking? The key is to understand the internal relationship among financial development,technological innovation and economic growth.In the theoretical part of this paper,financial development and patent department are introduced into the theoretica l framework of endogenous economic growth,while labor decision-making is introduced into the family department to improve the theoretical model,and the relationship between financial development,technological innovation and growth is deduced by establishing four departments,i.e.the final product department,patent production department,innovation department and family department,and conducting competitive equilibrium analysis.First of all,from the overall point of view,the effect of financial development to promote growth comes from its role in innovation,which is an important channel for financial development to affect economic growth;second,from the micro enterprise level,financial development is conducive to enterprises to expand their exter nal capital sources,ease their financing constraints for innovation,thus helping their patent output,and ultimately promoting economic growth Thirdly,the financial development is further subdivided,and the equity market and credit market play a heterogeneous role in the growth model.Finally,this paper notes that the promotion role of financial development is asymmetric,and the higher the degree of dependence on external financing and the high-tech intensive degree of enterprises,the more they need to finance innovation behavior,the more their innovation output benefits from the growth of financial development level.From the perspective of micro mechanism,this paper makes an empirical test on the relationship between financial development and econ omic growth.The results show that: first,financial development can significantly promote the R&D input and patent output of enterprises,but it has a heterogeneity effect on the substantive technology innovation equity market and credit market,and the equity market can promote the technology innovation of enterprises,while the credit market can promote the technology innovation of enterprises The new promotion has no significant impact.Second,financial development has a significant role in promoting the growth of micro enterprises,which has no difference in different financial markets.Third,the establishment of intermediary effect model found that enterprise innovation has the role of channel,which can transmit the impact of financial development o n economic growth.Part of the impact of financial development on economic growth is achieved through intermediary variable enterprise innovation,which is an important channel for financial development to affect growth.Fourthly,Sobel and bootstrap are used to prove that micro enterprise innovation is an important channel for the equity market to affect economic growth.The innovation transmission mechanism of enterprises can transmit the impact of 19.2% equity market on economic growth.However,there is no channel for innovation mechanism in the credit market,which is still stable under different test methods and different industry environments.The innovations of this paper are as follows: first,in the theoretical model,different from the previous literature's concern about the input cost of innovation,this paper considers the innovation output,and brings the patent department and financial development into the theoretical model of endogenous economic growth for discussion.In addition,it also introduces the labor decision-making into the family sector,improving the decision-making process of labor.To clarify the relationship between the three from the theoretical level,the mechanism process of financial development promoting innovation output and promoting economic growth by tightening the financing gap of enterprises is more clearly presented.Second,identify the intermediary effects of R&D input,patent output and technological innovation between financial development and economic grow th,and find that finance promotes economic growth through technological progress.Different from the previous literature,this paper focuses on the technology input represented by R&D input,technology output represented by patent application and the chan nel function of substantive technology innovation represented by the number of invention applications.Sobel and bootstrap methods are used to first quantify the ratio of financial development to economic growth,and further confirm the channel of enterprise innovation in finance Supporting the important role of economic growth provides a clear logical basis for financial support for the development of innovative economy,which is a supplement to the literature of channel identification in this field.Third,in terms of research methods,the paper discusses the possible endogenous problems of financial development and economic growth in detail and deals with them from three aspects: in order to solve the reverse causal relationship between financial developm ent and economic growth,the RZ framework is extended to the enterprise level;in order to deal with the missing variables that do not change with time,such as the characteristics of enterprises and macroeconomic shocks,the fixed variable is adopted In addition,the number of historical banks and the degree of trust are introduced as the instrumental variables of financial development to deal with the missing variables over time.Fourthly,from the perspective of research,this paper puts forward a new perspective to analyze the impact of financial development on economic growth from the perspective of micro enterprise innovation mechanism.In the empirical research on the field of financial development and innovation in China,most of the provincial panel data are taken as the research samples,lacking of evidence from the micro enterprise level.This paper explores the role and difference of different types of financial resources in technological innovation of micro enterprises and the role of channels for output growth,enriching the supporting evidence at the micro enterprise level.Generally speaking,the current situation of financial development in China does not match the demand for technological innovation.On the way of China from a big manufacturing country to a strong manufacturing country,technological innovation is the golden key to accelerate the process.It is imperative to promote the comprehensive reform of the financial system to effectively drive the development of technological innovatio n in China.The policy recommendations of this paper are as follows: first,to promote the credit market to form an effective support for technological innovation of enterprises,optimize the scale structure of the banking industry to match the scale of technological innovation enterprises,and reduce the information asymmetry and repeated selection cost between banks.This is due to the information asymmetry in the financing channels of the credit market.For example,large state-owned banks prefer large-scale high-tech enterprises with full mortgage to light asset technology enterprises with innovation ability when injecting capital into innovation projects.This is an unhealthy financing structure.In the future,the bank's willingness to invest in high-tech SMEs can be improved by providing loan guarantee by the government.In addition,to promote the complementarity between commercial banks and different levels of institutions,such as win-win cooperation with venture capital.On the one hand,commercial banks can make use of the information advantages and related skills of technological innovation enterprises mastered by venture capital institutions.On the other hand,venture capital institutions can use sufficient funds of commercial banks to reduce transaction costs and supervision costs.Second,we should strengthen the role of equity market in stimulating technological innovation and accelerate the establishment of a multi-level capital market system that provides financial services for technological innovation enterprises.At present,the A-share market is dominated by the main board market of Shanghai and Shenzhen,and it is relatively easy for large-scale high-tech enterprises to obtain financial support;while the proportion of small and medium-sized board and growth enterprise board is small,and the profitability requirements for enterprises make it easy for small and medium-sized technology enterprises in the mature period and high growth new type to be affected when financing.Scientific and te chnological innovation board should be taken as the main breakthrough point of incremental reform,breaking the profit requirements and complementing the registration system.On the one hand,it can reduce the listing threshold of small-scale technology enterprises,on the other hand,it can be combined with Chinese depository receipts to welcome Unicorn enterprises listed overseas to return to A-share market and promote the stock upgrading of China's capital market.In addition,it is more difficult for unlisted technology companies to raise funds.They need to provide OTC markets such as venture capital funds.Therefore,in order to meet the direct financing needs of enterprises with different scale and innovation ability,it is urgent to build and improve the multi-level capital market.