| R&D expenditure is the source of enterprises'innovation and sustainable development capacity, and also the cornerstone of the core competence formation. The "Long-term Scientific and Technological Development plan (2006-2020)" promulgated in 2006, proposed defiantly to spend 15 years to make China into an innovative country which need to guide and encourage a large number of enterprises to increase investment in R&D. Related researches show that R&D investment can improve business performance and investor market returns and bringing excess profits. In the same time, technical complexity and uncertainty of success of R&D investment make it a vast of risk. The increased earnings and risk of enterprises induced by R&D activities must be shared by the various parties who fund the enterprises, and capital structure is such a mechanism. The purpose of this paper is to answer the following questions:whether there is relationship between capital structure and R&D expenditures, what is the relation? Dose R&D expenditures affect capital structure? Since the dates of R&D expenditures are not readily available, there are few systematic researches on relationship between capital structure and R&D expenditures in current literatures, and the innovation of this paper is to obtain relative financial data of R&D of listed company R&D expenditures manually and answer the issue empirically.In order to verify whether the characteristics of R&D expenditure have impact on capital structure, this paper sorts the previous domestic and abroad literatures and introduces characteristics R&D expenditure and capital structure status in our country, then analyzes the theory and uses test hypothesis empirical method, and finally draws conclusions and make policy recommendations. This paper uses the data of the listed companies in 2004 to 2007 in bio-pharmaceutical industry in China as an example, tests the relationship of these companies'R&D expenditure and its characteristics with capital structure.The results show that companies with R&D expenditure disclosed in annual reports are more likely to use debt financing than those don't disclosed, as well as have lower cash-debt ratio; low R&D intensity companies have more tendency of debt financing than high R&D intensive companies, as well as lower cash-debt ratio; but the companies'R&D intensity and whether they disclosed R&D expenditure in annual reports don't have any significantly relationship with issue new shares; the results also show that whether or not the companies disclose R&D expenditure has nothing to do with they have or not dividends, but the frequency of dividend has significant positive relationship with R&D intensity, while the relationship is weakened after adding control variables.Finally, this paper also uses quantile regression to test the impact of R&D expenditure and characteristics on capital structure different sub-sites before and after adding control variables, the results show that, the impact of R&D intensity on asset-liability ratio, cash flow to debt ratio, cash ratio of total debt changes significantly after adding control variables, although effect degree is weakened after adding control variables, it is to strengthen with the sub-digit level increasing which shows little difference before and after adding control variables. |
