Listed Companies In China R&d Investment And Internal Cash Flow Analysis

For a long time, China has been the lowest end of the world factory. The reason is that China has not got a complete intellectual property protection scheme and sufficient research&development investment.As the society engines, the enterprises should take on the responsibility of R&D. This paper adopted the model derived from Euler Equation and researched on the financial constraint in R&D with the method of Generalized Method of Moments (GMM).The results show the companies who went public in China are normally impacted by financial constraint. Especially in terms of R&D, the internal cash flow of a certain company plays a key role. However the influence of cash flow is even much more significant for small companies. While due to mature management, goodwill and strategy, the giant companies seems to be immune to both internal and external financial constraint.