The Impact Of Financing Constraints On Corporate R&D

In 1990,based on the Neoclassical Theory,economists who represented by Paul Romer and Robert Lucas published New Economic Growth Theory,also known as Endogenous Growth Theory.They believed that economic growth is driven by the development of the new forms of technology,and is primarily the result of endogenous and not external forces.The new economic growth theory values the investment in human capital and technical innovation.It holds that those are the significant contributors to economic growth.Based on the New Growth Theory,we know that technology progress and innovation plays a major role in economic development.Giving to the booming of domestic internet and high-tech companies,this article intents to analyze the financing constraints problem on R&D investment.At the same time,considering the current overheated situation in domestic financial market,we'd like to emphasis that financial development is the major leverage and accelerator of technology innovation,not the driving force of economic development.Therefore,with the help of this article,we hope to arouse the awareness of the whole society on the importance of technology development and innovation.In order to find out how financing constraints affected R&D investment,this article chose the domestic listed manufacturing enterprises,Internet companies,media and telecommunication companies(shorten for TMT companies)as analytical objects.The study analyzed their disclosed R&D investment during 2012 to 2016,by using the OLS and multiple index method,and eventually offered the suggestions in regard to national,financial institutions and enterprises.The finding shows that,the TMT companies,especially the internet companies demonstrate the significant financing constraints,which hold-up its R&D investment.The privately owned company's cash flow is very sensitive to its investment activities,which means the privately owned company suffered more constraints than SOE companies.From the financing point of view,the overall external financing ability of TMT industry is not optimistic,and its R&D expenditure mostly comes from the company own findings.As for the company investment,enhancement of a company's human capital will improve their innovation capability.