Research On The Impact Mechanism Of Stock Liquidity On Corporate Innovation

In today's globalized world economy,innovation has become the theme of economic development.Compared with the high-speed economic development in the early stage of reform,China has now entered the new normal of economic development.In order to maintain the sustainable development of economy,we must change the mode of economic development from relying only on factors and investment to innovation.However,in the global competitiveness report released by WEF in 2018,China's innovation capacity ranks only 28th.In this context,how to transform from "manufacturing power" to "creating power" is extremely urgent.As the main force of national innovation,the company is of great significance to the construction of national innovation system.The stock market can influence innovation activities of the company through a variety of mechanisms,including internal management system and outdoor financing channel.Therefore,stock liquidity,as one of the most important feature of stock market,has become an important topic to study of witch influence on corporate innovation.First of all,this paper takes A-share listed companies in 2010-2017 as the research object,and puts forward the research hypothesis by combining the domestic and foreign literatures.Then,take patent applications and R&D efficiency of the company as a measure of innovation,and Amihud illiquidity ration and return reversal indicator as a measure of liquidity,by using the fixed effect model to verify the stock liquidity's relationship with company innovation.It has been found that the improvement of stock liquidity can significantly promote the company's innovation,and the significance is improved with the extension of the lag period.In order to explore the mechanism of stock liquidity's influence on corporate innovation,combining agency efficiency,financing constraints and institutional investors,this paper uses the mediating effect analysis and moderating effect analysis framework to conduct research.The results show that stock liquidity can promote the company's innovation by improving the agency efficiency of the company,relieving financing pressure and attracting institutional investors.At the same time,the substitution variable method and grouping regression method are used to ensure the robustness of the research results.At last,based on a quasi-natural experiment that enlarging the scope of margin purchase and short sale underlying stocks,and according to the related theories and the predecessors' research results,this paper adopts the difference-in-differences method to examine causal relationship between stock liquidity and innovation.On the basis of the existing research,this paper discusses the internal mechanism of stock liquidity on corporate innovation by combining the research methods commonly used in psychological research,which is a new extension of the research on this issue.Finally,on the basis of the research results,this paper puts forward corresponding policy suggestions and measures,so that the stock market can better serve the substantial economy.