R&D Expenditures And Enterprise Growth

In the environment of globalized knowledge economic, enhancing the independent innovation ability, changing the economic growth mode and building an innovation-oriented country are the critical ideas for our country to improve the comprehensive competitiveness.As the principal part of improving independent innovation, enterprises are playing an important role gradually in building an innovative country. R&D investment is a fundamental way for enterprises to improve the innovation ability as well as a driving force for enterprises to have rapidly growth.Scheduled R&D investment and healthy growth are key factors for enterprises to keep a foothold in the market, they are also the particular interests of all investors concerned about.Therefore, we focus on R&D expenditures and enterprise growth, use the board of small and medium-sized listed companies as the research object and select the relevant data during 2004-2007 to build regression model.We intend to use the empirical method to analyze whether R&D expenditures affect the growth of enterprises,as well as how this affect works.First, we get a comprehensive factor out of 26 financial indicators to evaluate enterprise's growth by Factor Analysis Method. Second, we examine lag and short-term effects of R&D expenditures to the enterprise growth. Our results show that R&D expenditures have significant positive effects to the growth of enterprises which usually lasts a certain time in one to three years, besides, it's obvious that R&D expenditure has the most positive effect on promoting the company growth when it lags one-year. The last, we introduced the Quantile Regression Theory to explore the stage characteristics that may exist in these relationships.Our research shows that when enterprises are in high-growth stage, R&D expenditures have stronger effect on their growth.The control variables such as enterprise scale, profit ability, debt ratio and ages also have different effects on enterprise growth due to different growth stage.So our conclusion is R&D expenditures have significant positive effects to the growth of enterprises,and when enterprises are in high-growth stage, R&D expenditures have stronger effect on their growth.This conclusion provides active references for Chinese enterprises to promote technological change, optimize its structure and improve market competitiveness.