Research On The Impact Of Financing Constraints On Listed High And New Technology Companies’ R&D Investment

Research and Development(R&D)is not only the pusher of national economic development,but also the hard core of improving the core competency of enterprises. However our country is facing an embarrassing shortage of R&D investment,the R&D intensity is especially low. R&D Investment is affected by many factors,one of the key factors is the financing channels that provides the capital,but this fact is not been concerned about. This study concerns from the perspective of financing constraints,discussing the problem of insufficient R&D investment in China’s enterprises.This study is exploring the financing constraint problem of enterprise’ R&D investment that is based on the R&D Investment status of the current listed High and New Technology Companies in China,and combined with information asymmetry and the principal-agent theory,and it uses cash holdings theory to research how can cash holdings ease the R&D investment financing constraints. Beyond that,this study selected the 2008-2013 A- shares listed high and new technology enterprises in China who are listed on Shanghai and Shenzhen two city as the research samples and build a model based on Euler equation model of investment,then add equity financing,debt financing and variation of cash holdings variable to the based model,finally make a dynamic regression analysis by System GMM estimation method with balance panel data. This study divided the sample into state-owned and non-state-owned,young,mature enterprises by four samples to study the difference of R&D investment financing constraints between different equity properties and different growth period enterprises.This study draws the following conclusions:(1) the R&D investment of listed high-tech enterprises in our country is facing financing constraints,and non-state-owned enterprises and young enterprise are facing more serious financing constraint.(2) Internal cash flow is the important source of high and new technology enterprise’ R&D investment funds in our country and equity financing has positive effects on R&D investment; Debt financing has almost no effect on investment. Different types of enterprises have different financing methods: state-owned enterprises and mature enterprises tend to adopt equity financing way to get fund, non-state-owned enterprises and young enterprises seldom use this channel.(3) After adding variation of cash holdings variable,the regression coefficients of variation of cash holdings and R&D investment is not equal to zero and the result is significant. In addition to this, regression coefficients of internal cash flow and equity financing were significantly increased which proves that the sample companies use cash reserves management to alleviate the R&D financing constraints,if the enterprise does not consider the fact of variation of cash holdings, it will substantially undervalued the degree of companies’ financing constraints. In addition, it is worth noting that the state-owned enterprises are not tending to use cash reserves to ease R&D investment, and young enterprises are facing more serious financing constraints as non-state-owned enterprises, its motivation of using cash reserves management to ease the financing constraints is greater.