Research On R&D Information Disclosure And Cost Of Equity Capital

In order to maintain market competitiveness,SMEs need to invest optimally in R&D,becoming the important force to promote the National economic transformation and technological innovation.They also play a role in contributing to the economic growth and providing employment opportunities for the country.However,the financing difficulties facing SMEs seriously affects their further development,therefore how to effectively reduce the financing cost of SMEs has become a universal concern of the community.R&D is an important factor to evaluate the creativity and development potentiality of an enterprise,determining the value of future enterprises,and also one of the focuses of investors and other stakeholders.The relevant information disclosure will have a certain impact on the cost of equity financing,which will affect the enterprise's ability to acquire capital in the financing market.This provides a new way for enterprises to reduce the cost of financing,namely,to convey the signal of the enterprise by adjusting the quantity and quality of the R&D information disclosure of management and to change the financing environment through the spontaneous regulation of the capital market.This paper based on the development of China's capital market in the process of regional endowment difference brought about the market,and the nature of the different property rights can cause the difference of financing methods,such as the principle of agent theory and information transmission theory analysis of R&D information and equity costs between the mutual impact mechanism.Due to the regional disparity,the market process varies during the progress of our capital market;different nature of the property right leads to various financing methods.Based on the above facts,this paper analyzes the mutual impact mechanism between R&D information and equity cost with the assistance of the principal-agent theory and signaling theories.On the basis of the former theories,I construct the information disclosure index of R&D to show the information disclosure of enterprises,use PEG model(Price/ Earnings to Growth model)to appraise the equity capital cost of listed companies.Then,I take the empirical analysis of Chinese small listed enterprises as samples and verify the interaction between R&D information disclosure and the cost of equity capital.Through the research and analysis of this paper,improving information disclosure of R&D is able to reduce the cost of equity capital of listed companies in general.However,such correlation is not obvious among public companies in the area with lower marketing degree,the negative correlation between information disclosure of R&D and equity capital cost is clearer among samples in the area with higher marketing degree.In addition,the equity capital cost of state-owned listed enterprises does not demonstrate the correlation with their R&D information,which means that only non-state-owned listed companies in more developed areas can reduce their equity financing costs in the method of increasing information disclosure.Finally,policy recommendations are made to the supervisory instructions and enterprises according to the conclusion of this paper.