Corporate Governance,Tunneling And Corporate R&D Investment:

With the continuous improvement of the degree of integration of the world economy,the competition among countries in the world is becoming more and more fierce.In recent years,as China's economy has entered a new normal state and its economic structure has been continuously transformed and upgraded,innovation has played an more and more important role in China's economic development.Innovation is the foundation of a company's survival and is the source of its permanent competitiveness.If a company does not think about innovation,it will be as vulnerable as a rootless one.Only by innovating to build the core competitiveness of the company can the company remain invincible for a long time.Innovation is inseparable from research and development activities,and a large and continuous investment in research and development is a prerequisite for innovation.The R&D activities of enterprises usually have high risks,high uncertainty,high returns,long periods,etc.,which makes the company very cautious in R&D investment decisions.In addition to the agency cost in modern enterprises,the short-sight phenomenon of enterprises is more common.So they are unwilling to spend research and development.At the same time,many stakeholders have different attitudes toward R&D,which will lead to different enthusiasm for R&D investment,even conflicts.In the modern enterprise system,the internal organization of the shareholders' meeting,the board of directors,the management,and the board of supervisors,which have an important influence on the decision-making of enterprises,is defined by the mainstream scholars as the governance structure of modern enterprises.A good corporate governance structure can influence R&D spending by mitigating the agency costs of the company,such as"Tunnelling' of large shareholders,on-the-job consumption,or improving corporate social responsibility disclosure and reducing financing costs."Tunnelling" of large shareholders has become more and more common with the concentration of equity in modern enterprises.Such behavior has seriously damaged the interests of small and medium-sized shareholders and the company,and has greatly hindered the future development of the company.Due to the"Tunnelling" behavior,the large shareholders transferred the funds that were used for the normal operation of the company and future development through various means,which seriously affected the company's operations,and even failed to carry out continuous research and development activities,which inhibited the core competition of the company in the future.Based on the "Tunnelling" behavior of major shareholders,we studied the mechanism of corporate governance level affecting R&D investment of enterprises,and provided new ideas for subsequent research on R&D investment of enterprises.This paper constructs the corporate governance index by PCA,and empirically tests the relationship between corporate governance level and corporate R&D expenditure and the intermediary role of major shareholders' short selling through mediation effect test.Our research have found four main results.The first result is that there is a significant positive correlation between corporate governance and listed companies' R&D investment.This paper constructs the corporate governance index through PCA,and studies the relationship between corporate governance level and corporate R&D investment from the overall level.Through theoretical analysis,empirical test and robustness test,it is confirmed that the company's corporate governance will improve the R&D investment.Second,the "Tunnelling" behavior of major shareholders plays an mediator effect in the relationship between corporate governance and corporate R&D expenditure.that is,the improvement of corporate governance level increases listed companies' R&D investment by inhibiting the "Tunnelling" of listed companies'funds and assets.Third,in private enterprises,the impact of corporate governance on R&D investment is significantly greater than that of SOEs.Our fourth main result is that in technology-intensive industries,the impact of corporate governance on R&D investment and the mediator role of large shareholders "tunnelling" behavior are more pronounced than in labor-intensive and capital-intensive industries.