Working Capital Management,Innovation Investment Smoothing,and Total Factor Productivity

As technical efficiency improving constantly,the enterprise actual production is increasing close to the production frontier unceasingly.In high-tech industrial enterprises,innovation has become a persistent way to promote total factor productivity.Because of insufficient funds innovation investment tends to be volatile,which amplifies the risk of innovation output.Innovation investment smoothing decreases the uncertainty of innovation output that promotes the output benefit of innovation investment.From the Angle of capital using,this paper deeply analyzes innovation smoothing of the high-tech industry enterprises has a promoting effect on the total factor productivity.Meanwhile,we discuss the adverse effect of financing constraints on the total factor productivity,which is the motivation of enterprise holdings large short-term assets.Using ACF method measures the total factor productivity of High-tech industrial enterprises in 2000-2007.This method overcomes the endogenous problem and collinear problem in the process of estimation to production function.In the empirical part this paper adopts GMM method to solve endogenous problems.By adjusting the working capital investment,high-tech industrial enterprises can smooth the innovation investment.Financing constraints strengthen this smoothing mechanism of innovation investment.Improving the sustainability of the innovation investment promotes the growth of total factor productivity.The improvement of the sustainability of the innovation investment eases the damage which the financing constraints bring to the total factor productivity.