Research On Financial Constraints And Firm’s R&D Investment Efficiency

Firm`s R&D investment can`t leave the demand of money, however, due to the smallscale, lack of mortgage assets, low credit ratings and the R&D adjustment cost, smalland medium sized enterprises face more financial constraints in the process offinancing.all these seriously affected the enterprise`s R&D investment efficiency. Theresearch about financing and R&D focus on the macro point of view, this paper focuseson the micro perspective. We measured firm`s R&D investment efficiency, analyzed theR&D investment behavior,analyzed the influence factors of efficiency and the influenceof financial constraints on the R&D efficiency for small and medium-sized boards oflisted companies in China.In theory, we not only use the financial constraints theory in this paper, but also westudy how cash flow, external equity financing, debt financing and corporate retainedcash impact on R&D investment. In research method, we select622Chinese small andmedium-sized board of listed companies from2007to2012micro data by using thestochastic frontier model to estimate the efficiency of firm`s R&D investment. At thesame time, we use the number of the dividend payment and structure of KZ index tomeasure financial constraints to study the effect of financial constraints on corporateR&D efficiency.In this paper, the research conclusion is as follows:(1)Under financial constraintscircumstances, the level of R&D investment efficiency about small and medium-sizedboard listed company in our country deviate from the optimal level of about6%, theaverage efficiency of R&D investment is94%.(2)The R&D efficiency of financialconstraints set are less than the R&D efficiency of not financial constraints set whatevergrouped according to the number of dividend payment or to the Zscore value. With theconstant improvement of China`s market, especially the establishment of the hi-techboard market in2009, the financial constraints of the small and medium-sized enterprisein our country are improved significantly, financial constraints set enterprisesinvestment efficiency increased significantly.(3)The R&D investment efficiency inChina’s western region where are facing shortages of capital and facing greaterfinancialconstraints is less than the efficiency in the medium and the eastern region. Withdeepening of system reform, bank reform and the development of financialintermediation in our country, the difference is narrowed gradually. R&D efficiencyissignificant difference in different industries. The highest efficiency value is telecommunications in2012, it`s about0.9439; the lowest is extractive industries, it`sabout0.9399.(4)The financial constraints factors impact on R&D efficiencysignificantlybut for cash flow. On external equity financing, the financial constraints setaffect the efficiency more. On debt financing, the financial constraints set affect theefficiency less. On cash holding, the financial constraints set also affect the efficiencyless.