Effects Of Business Diversification On R&D Intensity In Construction Enterprises

As an industry closely related to the economy and human live, construction industry need to make positive responses in the depth adjustment period of insdutry restructuring of whole country. R&D(Reasearch and development) has emerged as a significant driver of the core vaule and competitiveness of enterprises recently, which means that making the transition through technological innovation and enlarging the investment of R&D plays a critical role in supporting sustainable development of construction enterprises. In addition, diversification is adopted widely in modern construction enterprises since it can disperse the risk; however, diversification is also thought of diversifying the R&D resources, so that the process of transition through technological innovation would be influenced. Then, whether diversification would restrain R&D intensity or not is an improtant issue to explore. Therefore, the reasearch seeks to examine the impact of diversifiacation on R&D intensity in view of internal transmission, focusing on the perspective of Principal-agent.Based on the relevant data from ENR listed Chinese contractors, diversification strategy types and business distribution of Chinese contractors in large scale are discussed. Related data from “China Statistical Yearbook of science and technology” and “National R&D resource inventory(?)” were collected to present the current situation of R&D in construction industry, the existing problems were pointed out as well. On the basis of theory of diversification, Principal-agent and R&D, this study firstly combed the transmission path of diversification on R&D intensity theoretically; and then made a corresponding empirical research. In this process, a mediation model was hypothesized and tested by hierarchical multiple regression based on a sample of 74 construction companies listed in Shanghai and Shenzhen. Through data model selection and verification based on the unbalanced panel data, fitted results which prove the rationality of the hypothesises were given too.The results showed that:(1) The effect of diversification on R&D intensity in construction enterprises is negative;(2) Diversification would add to the agency costs;(3) Increased agency costs inhibit the level of R&D intensity, and mediate the effect of diversification on R&D intensity. Or in other words, diversification of construction enterprises has negative effects on R&D intensity indirectly while agency cost plays a transmitting role. In general, this study attempts to bring a new perspective in assessing impacts of construction diversification on R&D intensity and also give a empirical test. Construction enterprises of different types, meanwhile, could be guide by this study. In addition, some inadequacies existing in this paper were spelled out in the conclusion part.