An Empirical Study Of China's Equipment Manufacturing Industry Technological Innovation Ability Earnings Impact On The Ability

Since China’s accession to the WTO, the equipment manufacturing has been rapid development with global industry transfer ladder. Currently, the loss of labor cost advantages, the restriction of import and export trade and the technical barriers to competitors at home and abroad make China’s equipment manufacturing industry faced with the transformation of development mode. Economic efficiency of commercial enterprises shifts from the development pattern depending on high depletion, high investment, and heavy pollution and inefficient to the mode which emphasizes technology innovation, production efficiency and resource utilization. The equipment manufacturing industry is a national industry in China; it has become the backbone force of China’s economic growth and the growing strength of China. But, compared with developed countries, the technological innovation capability of China’s equipment manufacturing industry is relatively weak, and many enterprises are lack of initiative innovation consciousness, therefore, the enterprise profitability has not been improved. Quickening the space in self-motivated research and process improvement can be the powerful weapon of enhancing corporate profitability and competitiveness. In these circumstances, it is of importance to study the relationship between the technological innovation ability and profitability.This paper summarizes the related literature on technological innovative ability, corporate profitability, and the relationship between the two aspects at home and abroad, defines the definition of technological innovative ability and corporate profitability. Besides, this research selects scientific research personnel quantity, R&D expenses within budget, technology expenditure, expenditure for assimilation of technology, the number of R&D, the number of patent application, and new product sales income as the indicators to evaluate technological innovation ability, and divides them into two categories, resources input and efficiency output. To evaluate the profitability with gross margin index, and establish a multiple linear regression model. Based on7of the equipment manufacturing industry, selection of sample data from2002to2013,12years as the research object for empirical research. Firstly, indicators of seven sub industry in the equipment manufacturing industry technological innovation capability and profitability do descriptive statistics, and draw some basic conclusions. Then correlation analysis between the variables and put forward the corresponding assumptions, on the sample linear regression the correlation of technology innovation capability and profitability in the further verify by using the software of statistics.The empirical results that the equipment manufacturing industry of scientific research personnel and profitability were positive relationship, R&D expenses within budget and negatively related to profitability, Technical reconstruction expenditure and profitability were positively relationship.Patent application number, the new product sales revenue with profitability is positive. The relationship among the number of researchers, technical reconstruction expenditure and patent application number is of significance.Finally, according to the results of the empirical analysis of the reason, this paper puts forward five suggestions for the Chinese equipment manufacturing industry through technical innovation to improve profitability from the macro level and micro level.