Research On The Relationship Between Government R&D Subsidy,Institutional Investor's Shareholding And Enterprise R&D Investment

Science and technology innovation is the power source to enhance a country's core competitiveness and promote the development of national economic,enterprises are the main undertakings of national innovation activities,and they are also the practitioners to combine science and technology with economic tightly.Therefore,the technological innovation of enterprises is not only beneficial to their own development,but also plays an indispensable role in promoting the economic development of the whole country.However,there is a market failure in the R&D activities of enterprises.Therefore,in order to improve the R&D level of the whole society,the government needs to actively intervene in enterprise's R&D activities by subsidizing the R&D activities of the enterprises to correct the market failure.In recent years,the financial and technological allocations of our government have been increasing year by year.At the National Science and Technology Innovation Conference,the Academicians Assembly and the Ninth National Congress of the Chinese Association for Science and Technology held on May 30,2016,President Xi Jinping pointed out that it is necessary to continue to formulate and implement policies that encourage enterprise technological innovation,especially to support the technological innovation of small and medium enterprises.Whether the government R&D subsidies to enterprises can effectively encourage enterprises to carry out R&D investment,are widely concerned by the government and the academic community.How can we improve the effectiveness of government R&D subsidies?This question is worthy of further study.There is a serious agency problem in the R&D activities of the enterprise.The management is not willing to carry out R&D investment in consideration of its own interests.Moreover,in the case of accepting government's subsidy,opportunistic behavior of managers and major shareholders may also occur,which will affect the subsidy effect of R&D grants.As an important role in corporate governance,institutional investors will actively participate in corporate governance,ease the agency problems,reduce agency costs,and promote R&D investment increase due to their size,information and staff strengths,and liquidity risk,which made them more focused on the long-term value of the business.Therefore,this paper takes the small and medium enterprises as the research object,examines the influence of the government R&D subsidy and the institutional investors' holdings on the R&D investment of the enterprise,and explores the influence of the whole institutional investors' and heterogeneous institutional investors on the R&D subsidy effect.This paper has important theoretical significance and practical value on enhancing the use efficiency of R&D subsidy and the level of enterprise's R&D.Using the listed companies' data on Shenzhen SME board in 2011-2015,the study found:(1)Government R&D subsidies to enterprises can contribute to increase private R&D investment.(2)Institutional investors' holdings can promote the enterprises increase their R&D investment.(3)Holdings of the whole institutional investors have a positive impact on the relationship between government R&D subsidies and business R&D investment.(4)There are differences in the affect of different institutional investors on the subsidy effect of government R&D subsidy,the pressure resistance type of institutional investors can play a positive impact on the relation of government R&D subsidies and R&D investment,while the pressure-sensitive institutional investors have no significant impact on the relationship between the two.This article includes the following six parts:The first part is introduction.This part mainly introduces the research background,the research significance,the research goal and the research content of this article,explains the research method used in this paper and the innovation point,and summarizes the structure of the article.The second part is literature review.This part summarizes the existing literatures at home and abroad from the perspective of the relationship between government R&D subsidy and enterprise R&D investment,as while as the relationship between institutional investors' holdings and R&D investment.This part also makes a comment on the existing literature,and puts forward the research direction of this paper.The third part is theoretical analysis and research hypothesis.This part defines the related concepts,introduces technology innovation theory,market failure theory,information asymmetry theory and the principal-agent theory involved in the study,make theoretical analysis based on the theories above,and put forward the research hypothesis.The fourth part is research design.This section first describes the selection of samples and data sources,and then defines the relevant variables.Finally,design the corresponding test model for each hypothesis.The fifth part is empirical analysis.First,carried out the descriptive statistical analysis of the selected samples,and then execute the correlation test to determine whether there is collinearity and make preliminary validation of research hypotheses.Secondly,carry out the empirical test of the relevant hypothesis using the model designed in this paper.Then this paper analyzes the relationship between government R&D subsidies and R&D investment,as well as the relationship between institutional investors' holdings and R&D investment according to the empirical results.The impact of the overall holdings of institutional investors and the holdings of heterogeneous institutional investors on R&D subsidies is also tested.Finally,a robustness test is performed.The sixth part is research conclusion and suggestion.Through the empirical study of the above part,this part draw the conclusion of this paper,and put forward the relevant countermeasures and suggestions from the perspective of government,enterprises and institutional investors.Finally,summarize the shortcomings of this research and the prospects for future research.On the basis of the existing research,this paper has carried on the following two innovations:(1)This paper introduces the government R&D subsidy,institutional investors and enterprise R&D investment into the same research framework,and explores the influence of institutional investors on the relationship between government R&D subsidy and enterprise R&D investment.(2)This article has been innovative in the research content.The text not only explores the influence of institutional investors on the effectiveness of government R&D subsidy,but also explores the differences in the influence of heterogeneous institutional investors.