Manufacturing Financialization And Technological Innovation

With 30 years of reform and opening up, China’s economy and comprehensive national strength has been significantly improved. The manufacturing industry in the international market share has been increasing and the international competitiveness has made great progress. "China manufacturing" is famous in the world. However, behind the remarkable achievements, we cannot ignore the fact that the manufacturing industry of our country faces the domestic and foreign competition is more and more intense. Especially in the case of the weakening in the population resource, low-end manufacturing costs rise, and high-end manufacturing is weak in competitive. The main business profit of manufacturing enterprises is decline. The product price advantage is no longer exists. Economic growth slowed down lead to overcapacity and insufficient demand etc, these problems are highlight. Manufacturing rapid development encounter difficulties, so transformation and upgrading is imperative. Technology innovation as the inner motive power of enterprise survival and development become the key to the development of transformation. Very different from manufacturing industry profits plunged, with the development of financial deepening, financialization process intensified, entity enterprise try to make the financial investment constantly, so the financial assets proportion increase gradually. Get reap profits by financial investment activities, and this will further attract economic activities from the business entity to financial investment. Manufacturing enterprise profit is no longer the main business of the important ways to make a profit, which turns into a growing financial investment. Manufacturing shows the trend of financialization, this trend will profoundly affect the business of investment decision and the long-term investment of technology innovation. What’s more, the European and American developed countries experience tells us that the excessive financialization of manufacturing will weaken the enterprise development foundation and increase the enterprises "hollowing out". Therefore, under the background of financialization in manufacturing, to research the manufacturing financialization how to influence the technology innovation, and provide suggestions for manufacturing enterprise financial investment to make it’s development is reasonable. This will stimulate the enterprise independent innovation, which is significantly to promote the transformation and upgrading of the manufacturing industry.Manufacturing enterprises are participate in deepening financial investment. Therefore this paper focuses on the research of mechanism in enterprise financial impact on the technological innovation activities. First of all, the article expounds on the background of manufacturing of the tendency toward financialization. Based on the following theoretical analysis, we make descriptive statistical analysis, empirical research and study suggestions. Using a combination of normative analysis and empirical analysis, from manufacturing financialization of internal and external conditions, to analyze manufacturing financialization influence on technology innovation, which selects Shanghai and Shenzhen a-share manufacturing listed companies’annual data during 2007-2013, from the micro perspective of listed companies research in different industries, different regions and different ownership situations, manufacturing financialization exactly what impact on technology innovation, so as to give some suggestions for China’s manufacturing industry to carry out independent innovation. Specifically, in the theory analysis part, we defined the concept of manufacturing financialization and technological innovation firstly, then we expounds the characteristics of manufacturing financialization, attributes, produce condition and the influence mechanism of technology innovation. On the basis of the oretical analysis, we make a descriptive statistical analysis on the factors of manufacturing industries financial indicators, financial, technological innovation and corporate governance and so on. We understand the manufacturing industry of the financial investment and technology innovation from the industry level. The part of empirical analysis, discussing the impact of financial trend to manufacturing industry’s innovation ability based on the theory of financial, using the mixed OLS estimates, fixed effects (FE) and one phase system GMM estimation methods, estimating and explanating manufacturing financialization affects technological innovation comprehensive for all samples and sampling data of divisions. Finally, from different areas and ownership to divide the listed company to do the robustness test, we put forward some policy suggestions for the transformation and upgrading of manufacturing industry in our country.Study found that:(1) The financialization of Chinese manufacturing industry has been more obviously inhibit the enterprise technology innovation ability and willingness to weaken the development of manufacturing capacity. (2) From the perspective of corporate governance, board size of positive influence on technology innovation and reasonable scale of the board of directors structure to promote enterprise long-term technological innovation; Institutional investors holding tend to pursue short-term profit maximization. (3) The state-controlled amplifies the financialization of the negative effect to technology innovation. (4) Exogenous financing for manufacturing enterprises has significant positive influence on technology innovation; however, enterprise scale showed significantly negative correlation to technological innovation.China’s manufacturing industry is overcapacity and the insufficient effective demand, the main business of slow development, which leads to the deterioration of the enterprise development and innovation environment and profitability was inhibited; While the lucrative of financial investment activities which is strength the enterprise financial investment preferences, this causes the enterprise to pay more attention to the short-term profit. Research on manufacturing industry of listing corporations’micro data results show that:manufacturing financialization has more significantly inhibit innovation activities of the enterprise. So in order to promote the innovation and development of enterprises and to achieve transformation and upgrading of manufacturing enterprises, we put forward the following suggestions:(1) To control of excess capacity and optimize the environment of manufacturing industry development. (2) To foster strategic investors and exert the corporate governance effect of institutional investors; (3) To improve the financial market system, inhibited financial speculation; (4) To encourage technological innovation and accelerate the transformation and upgrading of manufacturing industry.