Correlation Of High-tech R&D Investment And Firm Performance

As the main activity in modern economy, enterprise which have been considered an important factor in the measure of a country’s power of economic are playing a crucial role in the context of globalization. Therefore, how to improve their worldwide competitiveness becomes an issue of concern in each country. Since the prevalence of Keynesian and Discretionary Approaches after the war, the major developed economies has used both fiscal and monetary policies to encourage enterprise to research and innovation for the purpose of enhancing the strength and competitiveness of economics and has achieved significant result. The Chinese government unveil a series of R&D policy when they increasingly recognizes the importance of research and innovation for the survival and development of enterprises in 1990s. In 21st century, SMEs instead of large enterprises become the focus of economic sphere because of the deepening understanding in the field of micro-economic. Unprecedented financial support, policy tilts and R&D subsidies are helping SMEs to become the main push for national development. Thus, there is a strong practical significance to choice high-tech SMEs as samples and study the relationship between R&D in enterprise and the performance; at the same time, due to the lack of accepted scientific and consistent empirical findings, the study also has some academic sense. Base on the Zhongguancun Science Park, this article use dimensionality reduction and multiple regression method to reveal the contribution of research and development trend of SMEs through analyzing activities of scientific research and horizontal comparison by selecting five consecutive years of financial data and R&D-related information of 255 high-tech SMEs companies. The result shows that there is significant positive correlation between firm R&D in Zhongguancun Science Park and firm performance. Thus, the paper suggests policy makers to increase research and development investment, change the way in subsidy, establish long-term mechanism, evaluate research activities scientifically and increase the transformation channels.