Development Zone And Corporate Investment

In May 2019,China issued the "Opinions on Promoting the Innovation and Improvement of National Economic and Technological Development Zones and Creating a New Highland for Reform and Opening-up",which means the development zone facing the new missions and connotations.When the global economic,trade,technology,and industrial patterns are undergoing profound changes,whether the development zone can meet the development requirements of the new era,promote the R&D and innovation of enterprises in the region,and produce new agglomeration effects is essential to the development zone sustainable development and economy high-quality development.The impact of the establishment of development zones on the local economy is ultimately reflected in the micro-enterprises within the territory.Therefore,research on the construction effects of development zones must be based on the behavior of micro-enterprises in the territory.Unfortunately,as an important platform for carrying national and regional development strategies,most of the existing research on the economic effects of China’s development zone construction focus on national development zones.There is no research involving the establishment of development zones and corporate investment activities,and no research about the comparison of the different impact between development national zones and provincial development zones.This paper uses the data of China’s listed companies from 2007 to 2018 and the manual collection of corporate information in the development zone,using the DID model to empirically test the relation between construction of different levels of development zones and corporate investment activities in China from the corporate innovation investment,M&A investment and investment efficiency.The influence of the investment behavior of enterprises within the domain.The main research conclusions are as follows:First of all,this paper analyzes the impact of development zones on corporate innovation behavior,empirical results shows that there are obvious differences in the impact of the construction of development zones at different levels on the innovation investment of enterprises:the establishment of national development zones can significantly promote the innovation investment of enterprises in the region,while the provincial development zone showed negative effect on enterprise’s innovation investment.There are also obvious differences in the influence mechanism of national and provincial development zones on the innovation investment of enterprises in the region:tax incentives,government subsidies and financing support,as well as financial resources,R&D talents and economic entities are the possible channels that national development zone promotes the innovation investment of enterprises;while the development of provincial development zones is more likely to be affected by regional GDP and industrial competition to squeeze out enterprises’ innovation investment,which is more obvious when regional officials change.Further research found that the promotion effect of national development zones on the innovation investment of enterprises is more obvious in regions with a higher degree of marketization and central state-owned enterprises;while the restraining effect of provincial development zones is more obvious in regions with a lower degree of marketization,State-owned enterprises,especially local state-owned enterprises.Secondly,there are also differences in the effect of development zones at different levels on the M&A investment of enterprises in the region:national-level development zones tend to promote the connotative development of enterprises in the region,and overall reduce M&A;while enterprises in provincial-level development zones have adopted more extensional development and increased M&A and expansion.Moreover,the inhibitory effect of national-level development zones on corporate M&A is more obvious in regions with a higher degree of marketization and central enterprises;while provincial-level development zones can promote corporate M&A in regions with a lower degree of marketization.However,in local state-owned enterprises,the promotion effect will be more significant.Besides,the research on M&A motives also found that the M&A behavior of enterprises in national development zones is more driven by connotative innovation,which is manifested in more technology M&As,high-tech enterprise M&As,the acquired with more patents and horizontal mergers in the industry,the reduction in mergers and acquisitions of enterprises in the domain is mainly reflected in the reduction of irrelevant diversified mergers,territorial mergers and vertical mergers;while the mergers and acquisitions of enterprises in provincial development zones are more based on regional economic competition and the improvement of the industrial chain is manifested in more irrelevant diversified mergers,territorial mergers and vertical mergers.Finally,the analysis of M&A performance also reveals a result that is secretly consistent with M&A motivations:Although different levels of development zones have no significant impact on the short-term market M&A performance of enterprises in the region,the innovation-driven enterprises initiated by state-level development zones Mergers and acquisitions will have better long-term accounting M&A performance,while the extensional expansion-based M&As initiated by enterprises in the provincial development zone will show worse long-term accounting M&A performance to a certain extent.Finally,this paper also examines the impact of development zones at different levels on the investment efficiency of enterprises.The empirical results show that national-level development zones can significantly improve the investment efficiency of enterprises in the region,while provincial-level development zones reduce the investment efficiency of enterprises in the region.At the same time,we divided the investment efficiency of enterprises into samples of overinvestment and underinvestment.After that,we found that national development zones have a significant inhibitory effect on underinvestment in enterprises and inefficient investment caused by overinvestment;while provincial development zones also have a significant inhibitory effect on the underinvestment of enterprises,but it will also promote enterprises in the region to overinvestment,in all reducing the investment efficiency of enterprises.Mechanism studies have shown that the establishment of national development zones will improve corporate investment efficiency through policy support to ease the financing constraints of enterprises,the competitive effect brought by the agglomeration economy,and the innovation-driven orientation to reduce the short-sighted behavior of corporate executives in the region;on the contrary,the province under the influence of regional economic competition and the short-term policy intentions of local governments,enterprises in provincial development zones will pay more attention to short-term economic performance and reduce their investment efficiency by increasing the short-sighted behavior of business executives in the region.Furthermore,our research also shows that the impact of different levels of development zones on the investment efficiency of enterprises is also significantly different among the samples of state-owned enterprises,regions with high degree of marketization and high quality of information disclosure.The research in this paper provides a decision-making reference for China to optimize the construction of development zones at all levels and promote the highquality development of regional industries.