Impact Of Financial Misallocation And R&D Investment On Firm Performance

Nowadays rapid development of technology and knowledge, innovation and technology determine the way of the country’s industrial restructuring to improve the status and competitiveness of the country in the international arena from a macro perspective. From the micro level, technological innovation of an enterprise is an important factor in maintaining sustainable competitive edge in the industry. In the context of China’s financial ownership of discrimination, financing costs of the different nature’corporate is different. If companies want to achieve sustained positive profit, they need to improve productivity through R&D investment, and then provide continuous power for obtaining a positive return. Private enterprises often face "financial difficulties", and these companies have a high return on investment, and they are an important force for innovation activities. Therefore, this paper presents a financial mismatch’s perspective, R&D investment will affect corporate performance assumptions for national innovation policies and business growth at the micro level with macro-level economic importance.This paper will analyze theoretical models and empirical analysis, it will be in-depth study of R&D investment and financial mismatch impact on business performance in financial mismatch conditions. First, this paper describes the basic theory and defines the relevant concepts. Then it analyzes the theory of technological innovation and R&D investment on business performance and financial mismatching corporate performance impact mechanism. It laid the foundation for the empirical analysis below. Second, it selects a variable index and builds multiple regression models. Then we do the empirical analysis according to industrial enterprise data. It is divided into two parts. The first part, we do overall regression through fixed-effects panel data model. We analyze the correlation between R&D investment, financial mismatch and corporate performance. The second part, we improved measurement methods. We use threshold regression model on R&D investment and corporate performance for existing possible thresholds on the role of non-linear relationship.The results show:first, the higher the degree of financial mismatch is, the lower its level of performance is. Financial mismatch degree of the private nature’corporate is higher than financial mismatch degree of the state-owned corporate. Second, R&D intensity and firm performance in the current period has a significant negative correlation between the impact of R&D intensity t+1rate of return on capital in turn positive correlation, but not significantly; R&D intensity and the rate of return on capital in period t+2becomes a significant positive correlation between corporate profit that increased investment in R&D has a positive impact on the return on capital lagged two periods. R&D investment intensity nature of state-owned enterprises on corporate performance impact factor significantly is less than the role of the private nature of the business R&D investment intensity on firm performance. Third, R&D investment intensity exists corporate performance threshold. Before reaching the first threshold value, R&D investment business performance effect is not significant; before reaching the first threshold value to a second threshold value, R&D invest a significant effect on the performance of the enterprise; the second threshold is reached after the value, R&D investment in the role of corporate performance significantly. The private nature of the business R&D investment intensity interval has greater impact on overall business performance higher than the high-tech R&D investment position of state-owned enterprises nature of the business.Finally, based on the conclusions this paper makes policy recommendations for financial mismatch problems and how to improve the R&D investment from both corporate and government levels.