Impact Of Rmb Exchange Rate Changes On Enterprises Innovation

In recent years,with the advancement of the RMB exchange rate reform and the deepening of internationalization,the RMB exchange rate has become more and more susceptible to international economic politics.Since 2018,the exchange rate of the RMB has increased,which affects the innovation of enterprises to varying degrees.Enterprise innovation is not only the fundamental guarantee for the sustainable development of enterprises,but also a measure of the level of scientific and technological development and core competitiveness of a country.With the advancement of the RMB exchange rate reform and the introduction of “Made in China 2025”,it is increasingly important for companies to innovate in a timely manner.This paper combines macroeconomic variables with micro-behavior of enterprises,and examines the impact of real effective exchange rate changes on firm innovation based on the background of exchange rate fluctuations after exchange rate reform.The paper focus on the mechanism of exchange rate changes on firm innovation.The study not only helps to improve the analytical framework of macroeconomic variables on the impact mechanism of micro-enterprise investment behavior,but also provides an empirical basis for the government to formulate practical macro-policies and realize the transformation and upgrading of manufacturing enterprises.This paper selects the real effective exchange rate data of RMB and the financial data of enterprise level from 2010 to 2017 as the basic data.Firstly,this paper explores the mechanism of the impact of exchange rate changes on enterprise innovation from the theoretical level.This paper summarizes the relevant theories of the impact of exchange rate changes on enterprise innovation as price transfer theory,market competition effect theory and intermediate product import effect theory.Based on the above theory,the channels of influence of exchange rate changes on enterprise innovation are classified into two categories: market competition channels and costs saving channels.Secondly,through the construction of three types of models,the relationship between exchange rate changes and corporate innovation is studied:(1)fixed effect model to analyze the correlation between exchange rate changes and enterprise innovation;(2)mediation effect model to verify the mediating effect of market competition channels;(3)the adjustment effect model to test the role of financing constraints.The above results were tested for robustness by replacing the indicators of the interpreted variables.Finally,based on the empirical results and combined with China’s actual national conditions,it puts forward corresponding policy recommendations on how the government and enterprises improve enterprises innovation ability in the context of increasing exchange rate.This paper finds that:(1)There is a significant positive correlation between the real effective exchange rate of RMB and enterprises innovation.The rise in the real effective exchange rate of the RMB will significantly promote corporate innovation,and the decline in the exchange rate will significantly inhibit corporate innovation.However,after introducing the heterogeneity of enterprises,it founds that the effect of RMB real effective exchange rate changes on enterprise innovation under different property rights is asymmetric.The exchange rate rise makes the innovation investment of non-state enterprises higher than the innovation investment of state-owned enterprises;(2)The real effective exchange rate changes will affect the enterprise innovation through the market competition channel.The specific performance is that the exchange rate rises will promote enterprises innovation investment by strengthening the substitution effect of domestic and foreign markets and accelerating the change of market structure t;(3)This paper examines the role of financing constraints based on the cost saving channel.The results show that the rise of exchange rate will significantly promote enterprise innovation,but financing constraints will have a negative adjustment effect on this result.For enterprises with light financing constraints,the rising exchange rate will promote the innovation of enterprises more obviously than those with heavy financing constraints.