Study On The Influence Of Equity Structure On Enterprise’s R&D Investment

With the intensification of world integration process, the competition between enterprises becomes more and more fierce, what every enterprise extremely concerns is how to succeed in the competition. Scientific and Technological innovation is the basis of improving the core competitiveness of enterprises and it has become the fundamental driving force of enterprises development. Through Scientific and Technological innovation, enterprises can improve productivity, reduce costs and develop new products to meet market demand. As the representative of technology innovation ability, r&d activity plays an important role in improving competitiveness and economic benefits of the enterprise. Our country has issued some relevant policies to support enterprise researching activities, for example, in calculating taxable income, our country allow enterprises to deduct extra50%expense besides actual R&D expense; As to capitalized R&D expenditure, enterprises can deduct150%of the actual amount of depreciation; according to tax law, the new emerging high-tech enterprise can operate without paying income tax in the first two years and pay income tax at the rate of15%from the third year. In addition, the government also give direct subsidies to high-tech companies and R&D projects. However, the gap of investment in r&d between our country and the developed countries is still large. Most scholars both at home and abroad who study the influence factors of r&d input always focus on external environment, however, with the increase of research literatures on corporate governance, more and more scholars study the issue from the angle of corporate governance, which provides certain theoretical support for my paper. Due to the high risk, large investment, intertemporal income and other characteristics of research and development activity, the managers would rather invest in projects which can bring benefit to the enterprise in the short term than r&d projects, while the owners of the company want to invest in high risk and high revenue research and development projects. Agency theory points out that appropriate governance mechanism can reduce agency problem, promote shareholders to supervise managers effectively and control invalidly strategic decisions made by mangers, thus helping to keep the appropriate level of the r&d spending and enhance the technology innovation ability of the enterprise. As one of the control mechanisms in the area of operators’residual rights of control, equity structure is the important system arrangement to resolve managers’ agency behavior. So this paper researches the influence of ownership structure on r&d spending empirically.Through analysis and explanation of the empirical results, this paper provides theoretical guidance and empirical experience for enterprises to optimize ownership structure, increase r&d investment and eventually improve the innovation ability.In this paper, I review domestic and international research literatures concerning the impact of ownership structure on r&d investment, on the basis of relevant theoretical analysis, I chose A shares listed company of manufacturing industry which publish r&d data of their companies as research samples. Among these companies I eliminate ST companies and those with unusual values or missing values. At last, I get1301companies. I look up relevant data about equity structure and r&d of the year from2008to2010, then I use appropriate variables to build the multiple regression model. With the help of software SPSS17.0,I get regression results. According to empirical study results, I find that ownership concentration and r&d investment have positive correlation. The higher the share ratio of executives, the more the investment in r&d projects.The proper use of ownership restriction role can help enhance the enterprise’s investment in r&d. What’s more, based on the conclusions, I put forward several suggestions to increase r&d investment, such as increasing equity concentration appropriately, decreasing stated-owned shares, carrying on equity incentives for managers and making full use of the role of ownership restriction. Finally, according to the deficiency of the article, I put forward the prospect of research.My innovation and contribution are mainly as follows:First, through looking up the audit opinions of the sample companies, I rule out the possibility of the influence of earnings management on the amount of capitalized R&D expenditure. Second, I use the property of actual controller as the proxy variable of equity property, not the share ratio of the largest shareholder used by most articles. This in some extent could help dig control theory deeply and broaden the related research. What’s more, I add the separating degree of cash flow right and control power to the ownership structure, through researching the relationship between the separating degree and R&D investment, this paper has opened up new avenues for improving ownership structure and innovation investment of the company. Moreover, in my opinion, for the level of regional economic development puts great impact on the company’s R&D investment, so I add this variable as one of the control variables, this, to some extent, improved the fit of the model. Third, Previous academics in this field always choose one industry as research sample, such as biological medicine industry, the information technology industry, the automotive industry, etc. This paper selects the A-share listed companies of manufacturing industry as the research object, which expands the scope of study and offer common guidance to all manufacturing companies. Finally, in this paper, I choose data of the year2008to year2010, which ensures the data are all released after new accounting standards issued. This can make the research avoid the difference of statistical standard caused by the distinction between old accounting principal and the new one.