Research On The Impact Of Investment Preferences Of Local Government On The Enterpriese's Innovation Input

In recent years,with our country's economy sustained growth,all the countries have given a high degree of concern on China's pattern of economic growth.Economic transition has become a hot issue,and technological innovation undoubtedly plays an indispensable role in economic transformation.Enterprises are the principal part of technological innovation in our country,and the improvement of national competitiveness depends on the technological progress of enterprises.However,enterprises in our country still have the problems that they lack the innovative input and innovation incentives.Meanwhile,the vast majority of enterprises are short of core technology and international brand,which is unfavorable for the transformation of our economy.There must be some incentive mechanism and corresponding institutional arrangement hindering innovation behind this extensive growth model.Numerous literatures prove that Chinese style decentralization is the primary reason of local government bias in investment structure.Chinese style decentralization refers to the characteristics of fiscal decentralization and political centralization,which forms a pattern of economic gro.wth driven by local governments.China's economy clearly benefits from the yardstick competition between local governments,but this system can also be a root of China's extensive economic growth.In other words,in order to improve their performance and achieve faster economic growth,local officials tend to attach importance to infrastructure investment because it pays off in the short term.This paper demonstrates the existence of investment preference of local government under the influence of Chinese style decentralization,and the mechanism how this preference affects an enterprise's innovation input,providing an explanation for the insufficient innovation input of our enterprises.The investment preference of our local government has the direct and indirect effects on innovation input of enterprises.In terms of direct effects,the overheated infrastructure investment of the government will cause a large amount of financial resources to be occupied by local government infrastructure projects,resulting in financing difficulties for enterprises and thus inhibiting their innovation input,on the other hand,with the increase of the infrastructure investment,the improvement of the infrastructure will actually bring a lot of convenience for the production of enterprises,accompanied by the formation of the industrial cluster,both those will attract more capital and talent,which can encourage enterprises to implement innovation so that they can profit from the economies of scale.In terms of indirect effect,as a result of the existence of Chinese fiscal decentralization,local governments can easily affect the investment behavior of enterprises,which leads to the lack of innovation input of our enterprises.The research in this paper can be divided into two parts.The first part analyzes the direct impact of local government's investment preference on innovation input of enterprises,and uses provincial panel data and quantile regression to verify how this preferred infrastructure investment affects enterprises'innovation input,and concludes as follows:infrastructure investment of local government in the industry of-supply of electricity,gas and water as well as the industry of transportation,storage and postal services will have a positive impact on enterprises'innovation input,and these two types of infrastructure investment will have a stronger incentive for enterprises with less innovation input,and the infrastructure investment in the industry of water conservancy,environment and public facilities management also has a promoting effect on the innovation input of enterprises,but this promoting effect is more significant in the enterprises with more innovation input,in addition,the infrastructure investment of local governments in the industry of information transmission,computer service and software has a negative effect on the innovation input of enterprises,and has a stronger effect on enterprises with less innovation input.The second part uses the sample of the A shares listed companies,and analyzes the indirect impact of local government's investment preference on innovation input of enterprises,in the last,a conclusion is reached holding that the higher the degree of fiscal decentralization is,the more easily the local government can affect the investment behavior of enterprises.Besides,because the large enterprises have greater contribution to the economic development,local governments tend to pay more attention to their investment behavior,as a result,the innovation input of this kind of enterprises is more affected.Finally,based on empirical analysis conclusion,some relevant suggestions are given.