Equity Structure,Financing Constraints And R&D Investment

In the perfect market,company's investment activities and financing activities are independent of each other,that is,company's investment activities aren't affected by financing activities.However,the real capital market is often imperfect due to the existence of information asymmetry and principal-agent problems.The imperfect capital market makes it hard for companies to finance the required funds for investment,inhibiting the companies' investment behavior,and even lead some companies to give up investment Project because they can't finance the required funds for investment,resulting in underinvestment.As an important activity to push technological advance and maintain the company's core competitiveness,R&D investment is often faced with more serious financing constraints due to the high degree of uncertainty and non-measurability of R&D investment returns.Financing constraints is the major reason of underinvestment.As China's GEM listed companies are generally smaller in scale,they face more serious R&D investment financing constraints.From the perspective of corporate governance,ownership structure is an important endogenous variable that affects the company R&D investment activities.By studying the relationship between ownership structure and R&D investment of the listed companies in the context of financing constraints,we can study the influence of company's internal governance on company R&D investment from the internal management of the company.Based on principal-agent theory,information asymmetry theory,financing constraint theory and innovation theory,this paper studies the relationship between ownership structure and R&D investment under different financing constraints with the starting point of listed companies on GEM.In this paper,the financial data and corporate governance data of China's GEM listed companies from 2009 to 2016 are selected as the research samples.The descriptive statistics,correlation analysis,multiple linear regression analysis and propensity score method(PSM)are used to analyze the sample data in all directions and angles.This paper deeply analyses the relationship between equity structure and R&D investment of China's GEM listed companies in different levels of financial constraints.This paper use company's size and dividend changes to measure the company's financing constraints facing.According to the company's financing constraints degree,this paper studies on the relationship between ownership structure under the equity concentration,equity balance,venture capital shareholding,joint venture capital shareholding,existence of venture capital and R&D investment of listed companies on GEM.At the same time,this paper also investigates differences in the R&D investment behavior between state-controlled listed companies and non-state controlled companies on GEM.The main conclusions of this paper are as follows:Firstly,R&D investment of China's GEM listed companies is facing financing constraints,which means cash flow and R&D investment is positively related;Secondly,equity concentration of China's GEM listed companies is negatively correlated with R&D investment.Equity balances are positively related to R&D investment,that is,equity concentration is not conducive to R&D investment of China's GEM listed companies.Equity balances is beneficial to R&D investment of China's GEM listed companies;Next,the proportion of venture capital holdings of China's GEM listed companies is positively related to R&D investment,Venture capital joint ownership is positively related to R&D investment;Venture capital holding company's R&D investment is higher,that is,venture capital holding is beneficial to promote R&D investment of GEM listed companies;Under different financing constraints,the relationship between ownership structure and R&D investment is not consistent;Finally,there is a difference in R&D investment between non-state holding companies and state-controlled GEM listed companies.