R&D Investment, Ownership Structure And Corporate Performance

In the era of knowledge economy, the role of science and technology as the first productive force become more prominent. If the enterprise wants to survive and develop in the growing market competition and rapidly changing technological innovation, it must improve the technology innovation ability and master the core technology, so as to enhance their market competitiveness and comprehensive strength, all of this depends on enterprise’s R&D investment. In recent years, China’s enterprises gradually realize the importance of R&D activities and their R&D investment increased significantly, the domestic research on R&D investment is also quite rich, but failed to reach agreement. As an important part of the national scientific research and development strategy policy, the auto industry’s R&D occupies an important position in the national science and technology plan, the R&D investment amount and investment strength has always rank in the leading position in China, however the research literature of auto industry’s R&D is little. The characteristics of R&D activities, referring to high risk, inter-temporal income and asymmetric information, will lead to serious principal-agent problems, ownership structure is just an effective mechanism to solve these. Based on this background, this paper decided to explore the relationship among R&D investment, ownership structure and corporate performance in auto industry.In this paper,based on reading, analysis of domestic and foreign research literature, through the concept definition and theory analysis, we got a deep insight into the relationship among R&D investment, ownership structure and corporate performance. On all of this, we selected China’s auto industry listed companies data during 2010 to 2013 as the sample. Firstly, set R&D data as the independent variable, the rate of return on total assets(ROA) and economic value added(EVA) as corporate performance evaluation index, carried on an empirical analysis of the correlation and hysteresis between R&D investment and corporate performance in auto industry. Then set the ownership structure as independent variable and R&D investment as the dependent variable,explored the influence of ownership structure on R&D investment. Finally introduced the ownership structure as moderator variable, using the method of hierarchical regression and subgroup analysis, explored the ownership structure’s moderating effects on the relationship between R&D investment and corporate performance from two aspects of the nature of ultimate ownership and ownership concentration.The results showed that:(1)In all, compared with the multination al auto companies, the R&D investment of China’s auto industry is lo w;(2)In auto industry, R&D investment and corporate performance are positive related and without a lag;(3)The nature of the ultimate own ership is a homogeneous moderator variable, it is not conducive to the auto industry’s R&D investment itself, what’s more, it play a ne gative role and will weaken the positive correlation between R&D in vestment and corporate performance;(4)In auto industry, ownership c oncentration is a pure moderator variable, it is conducive to R&D i nvestment itself and will give a positive influence on the positive c orrelation between R&D investment and corporate performance.Finally, based on the results of this paper, we gave some countermeasures and suggestions for the development of China’s auto industry, then explained the limitations in this paper and future research directions.