An Empirical Research On Relationship Among Corporate Governance, R & D Investment And Corporate Performance

As science and technology growing fast, knowledge time has come quietly. Competitions between corporations have surpassed differences of capital and human resources, and rely more on technology progress. Development of technology offers corporations with core competitive advantages so that it can create more profit. Based on the background, the article looked into relationships among corporate governance, R&D investment and corporate performance, with the desire to provide some theoretical proof to the public corporations' decisions about R&D investment.As for the relationship between corporate governance and R&D investment, as well as that between R&D investment and corporate performance, scholars from home and abroad have done research about them long before. But few of them combine the two relationships together. In the field of research about corporate governance and R&D investment, scholars mainly began their research with characteristics of the board, properties of chief shares, education background of management and so on, while this article take a totally fresh angle to make more deeply research on it. In the field of relationships between R&D investment and corporate performance, scholars used to take properties, size and shareholding characteristics into consideration and came to different conclusions. What's more, they discussed the issue in only one industry. Instead, this article takes much more industries into discussion, including all industries that have high R&D investment in both Shanghai and Shenzhen markets. Finally,470 public corporations were chosen as the sample.The article discusses the relationship among corporate governance, R&D investment and corporate performance in industries of extractive industry, manufacturing industry, information and technology, transportation and storing industry with samples from both Shanghai market and Shenzhen market. In the study of corporate governance and R&D investment, the article uses data, which is provided by trading software and sort out by the author, to come with the values of main explanatory variables. Then regression is used and conclusion was made that the background of management and chief shareholders both have significant positive impact on R&D investment. In the next part, the article comes to the conclusion that R&D investment promotes corporate performance significantly.According to the results of regression, the article gives some suggestions: firstly, a corporation should take good use of manager market and choose equity financing companies more carefully. Secondly, a corporation should increase equity financing while at the same time avoid exaggerating the impact of institution investors. Thirdly, corporations should attach high importance to sustaining R&D investment and differences among industries. At last, corporations should use encouraging mechanism for management with caution, besides increasing share concentration and proportion of state-owned shares.