Influence Of High-tech Small And Medium Enterprises Development Of External Equity Financing

In recent years, the state has proposed a lot of preferential policies and hasmade a big investment in order to support the development of high-techenterprises. But the problem that small and medium high-tech enterprises haveinsufficient funding is still not optimistic. Due to the launch of the GEM in2009,small and medium high-tech enterprises have been provided with a goodenvironment so that insufficient funding of R&D has been solved. So theinfluence of external equity financing on R&D is worth studying.Therefore,thepaper analyses the problem from two angles:(1) Whether external equityfinancing promotes the R&D investment?(2) whether external equity financingincreases the R&D efficiency?The paper selects companies listed on GEM from2010to2012as object ofstudies. On one hand, we study the status of R&D investment by descriptivestatistics analysis. We first study the relationship between external equityfinancing and R&D investment by building the Panel Data Model. Second, weuse mixed effects model to estimate regression parameters in this paper and usethe random effects model for robustness testing. On the other hand, we study therelationship between external equity financing and R&D efficiency, by first,using BC92model to estimate the efficiency of R&D, and second, by usingBC95model for further analysis of the relationship between external equityfinancing and R&D efficiency.The conclusions of this study are as follows:(1)External equity financing has a positive effect on the R&D investmentsignificantly, since the R&D investment of the companies that are listed onGEM has shown a clear upward trend.(2)The R&D efficiency has not changed obviously. Neither do they havethe economies of scale. In addition, we found that more than half of theenterprises have R&D efficiency that is above average.(3)External equity financing has played a significant role in promoting theR&D efficiency, though the impact is not great but very obvious. Finally, we put forward suggestions on how to efficiently use the external equity financing.