Family Holding,Equity Refinancing And Enterprise Innovation

Family business play an indispensable role in Chinese economy.In the fierce market competition,increasing innovation is the best choice for family business to win in this competition.The research on family business innovation started at the beginning of this century,and so far the research on the relationship between family business and innovation is very limited.Since 2010,the research literature on family business innovation has been increasing rapidly,which has been the focus of academic attention.However,the related literature on family business innovation mainly focuses on intergenerational issues,Pan-family business,organizational change and so on.Few papers discuss the impact of equity financing,especially equity refinancing,on family holding enterprises' innovation.This paper aims to explore and analyze the impact of equity refinancing on family holding enterprises' innovation activities through empirical analysis.Previous studies have shown that Chinese enterprises prefer equity financing for three main reasons: large dividends,low financing capital and insider control principal-agent theory holds that family business investment decision-making centers on family interests and generally has long-term investment orientation.When family owners are involved in management,family decision-makers form effective allocation within the enterprise,and produce synergistic effects,effectively reduce agency costs,and form decision-making agency advantages,which are conducive to enterprise innovation activities.Moreover,external equity investors can check and balance the controlling family,prevent enterprises from being hollowed out by family members and occupying the interests of minority shareholders,and alleviate the agency problem to a certain extent.The Tri-pole development model of family business shows that after a certain stage of development,the pace of diversification of family business will be further accelerated and the degree of diversification deepened.Therefore,it is necessary to break the restriction of traditional endogenous financing on the further development of enterprises by introducing various external financing means such as financial and strategic investment.This means that the family holding enterprises will introduce external investors in the later stage of development,in order to achieve the goal of long-term development.Therefore,through equity financing,family holding enterprises can provide resource guarantee for enterprises' innovation activities.The research object of this paper is listed family holding enterprises.From the perspective of equity financing,it mainly studies the impact of equity refinancing on innovation activities of family holding enterprises.This study enriches the relevant research on innovation activities of family holding enterprises from a new and unique perspective.This paper takes the panel data from Shanghai and Shenzhen A-share listed companies from 2008 to 2016 as samples for empirical research.Empirical results show that family firms are more inclined to equity refinancing than non-family firms when refinancing occurs,and the relationship between equity refinancing and enterprise innovation is tested.It is found that equity refinancing has a significant positive correlation with enterprise innovation,which indicates that equity refinancing really has a positive effect on enterprise innovation.Finally,through equity refinancing,family holding,and corporate innovation,equity refinancing has a positive effect on enterprise innovation.The analysis of the relationship between innovation ability and innovation ability shows that there is a significant positive correlation between family holding enterprises and innovation ability,whether from the perspective of innovation input or innovation output.Through empirical research,this paper draws the following conclusions:(1)Family holding enterprises are more inclined to choose equity financing than other enterprises.(2)Equity refinancing helps enterprises to innovate.(3)Family holding enterprises can provide strong impetus to increase innovative activities.(4)Family holding enterprises can promote innovative activities through equity refinancing.Finally,the paper puts forward relevant suggestions: the relevant government departments should further improve the SME financing and refinancing system,and carry out equity refinancing innovation.Family holding enterprises contribute to their innovation activities through equity refinancing.Therefore,they should strive for the opportunity of equity refinancing as far as possible.At the same time,they should rationally allocate refinancing funds to improve the allocation's efficiency of financing funds in the process of promoting enterprise innovation so as to give full play to its maximum effectiveness.