The Impact Of Economic Environment On Corporate R&D Input

With the high speed increase of China economy, the increase of corporate R&D input is very helpful for strengthening the ability of innovation. The upgrade of China industrial structure, style of economic increase and China national competence depends on the stronger innovative ability. Since enterprises are the principal actor of technologic innovation, they can play an important role during the process of increasing innovative ability. But in recent years, when China economy increase at the rate of more than 8% every year, the corporate R&D input shows some problems. The indicators of corporate R&D input increase at very low speed from 1997 to 2002, and they even show the downward trend in 2003.This essay focuses on the impact of external economic environment on the corporate R&D input of China industry, On the analysis of the panel data of Chinese industrial large and medium-sized enterprises, this essay tries to analyze the environmental effects of market need, industrial competition, external financial environment, industrial agglomeration, and FDI on R&D input of enterprises in 36 industries of China. The results show that the need of new product has a positive impact on R&D input of enterprises and it is the important power to stimulate the corporate self-financing R&D input, but it is not strong enough to stimulate the high speed increase of corporate R&D input; while the intensive competition in industries hasn't shown a general positive influence, with a more negative influence on capital input than on human resources input. And the external financial environment needs more improvement to reach the ideal level. Although as the important parts, financial loan and fiscal fund work positively to some extent, the external financial environment doesn't fully satisfy the need for corporate R&D financing. The enterprises can only more rely on self-financing for R&D activity. Industrial agglomeration creates technological externality and financial externality and helps to form the positive environment of corporate R&D activity, so it stimulates the increase of corporate R&D input. But FDI shows different impacts on two aspects. It stimulates the corporate R&D input on human resources while shows negative impact on R&D capital input. According to the empirical analysis, this essay draws some conclusions on the policy implication.