Empirical Research Of The Relationship Between R&D Investment And The Company Value

R&D investment is always the focus of the academic and practical world, because it will form a unique asset when the R&D activities are successful, which is the source of the company’s lasting competitive advantages. Nowadays, the market competitions are more and more fierce, and the innovation ability becomes an important factor of the company’s sustainable development, so a suitable R&D strategy is helpful to its growth. As we all know, just like an animal, company also needs to experience every stage of its life cycle, who must apply different management and financial strategies during different periods. So does the R&D strategies, which should adapt to the company’s actual requirements. Therefore, based on the perspective of the life cycle of enterprise, this thesis investigates whether the company’s R&D investment intensity and the R&D investment’s effect on the company value do exist differences during different periods of the life cycle of enterprise.In empirical part, the thesis examines the impact of company life cycle on the R&D investment intensity and the relationship between R&D investment and the company value during different periods by descriptive statistical analysis and multiple regression analysis, and comes to the following conclusions:(1) the R&D investment intensity of the growth companies is significantly higher than the mature and recession companies;(2) the value of the growth companies is related to previous R&D investment, while the value of the mature and recession companies is related to current R&D investment;(3) besides the life cycle of enterprise, some other factors, which affect the company value during different periods, exist differences.Combined with China’s reality, the following suggestions have been proposed on the basis of the conclusions:(1) the growth companies should add R&D investment;(2) keeping constancy of the R&D investment is good to the company’s sustainable development;(3) companies should arrange R&D investment structure according to their life cycle periods;(4) in order to improve the innovation ability, companies should become the main force of the R&D activities, as well as pay attention to the cooperation with government and other research institutions.The meanings of the research are:(1) grouping by the life cycle of enterprise and comparing the R&D investment of different periods, which will expand the range of recent theory and study;(2) providing a theoretical support for company’s suitable R&D strategy according to its life cycle, and enhancing its ability to participate in the international competitions. The innovation of the research is mainly reflected in:(1) measuring the effect of R&D investment on company value by Griliches Model,(2) making up for the flaw of just considering of company size, financing structure and corporate governance as to the value relevance research of R&D investment, then using life cycle of enterprise as a group standard and investigating the differences of the impact of R&D investment on company value.