Financing Constraints, Government Subsidies And R&D Investment

Since the Chinese economy entered the new normal,the level of scientific and technological development has increasingly become a powerful driving force for the progress of a country and the whole society.China's A-share listed companies also shoulder the important mission of promoting the national science and technology level,but the lack of research and development investment and financing constraints of Ashare listed companies have not been effectively improved.China's enterprise innovation base is weak,long-term belief in "market-for-technology" and neglecting independent innovation,making the "technical upgrade trap" and "skill upgrade trap" have been at the low-end of the global value chain.The report of the 19 th National Congress of the Communist Party of China pointed out: "Innovation is the first driving force for leading development is the strategic support for building a modern economic system." To achieve high-quality development,we must accelerate the innovation and development of enterprises,promote the transformation and upgrading of enterprises,and enhance the overall efficiency and competitiveness.The report of the 19 th National Congress of the Communist Party of China pointed out: "Innovation is the first driving force for leading development is the strategic support for building a modern economic system." To achieve high-quality development,we must accelerate the innovation and development of the manufacturing industry,promote the transformation and upgrading of the manufacturing industry,and enhance the overall efficiency and Competitiveness.The company's R&D investment is the core indicator for measuring innovation capabilities.The high confidentiality of research and development projects and the voluntary disclosure of R&D expenses have created information asymmetry between R&D companies and investors.Investors are unable to obtain the real situation of R&D projects,and may lack professional evaluation of R&D innovation activities.In order to protect their own interests,enterprises are often required to bear high financing costs,resulting in external financing costs far higher than internal financing costs,which leads to financing constraints,resulting in failure of resource allocation and maximization of economic efficiency.At this time,the government can invest in R&D activities of enterprises through direct subsidies,alleviating the financing constraints faced by R&D activities of enterprises,thereby correcting externalities and making up for losses.This paper selects the data of A-share listed companies from 2009 to 2018 as a research sample,and uses financing constraint theory,market failure theory and information asymmetry theory as research basis to study whether there is financing constraint on R&D investment behavior of A-share listed companies in China.The impact of local government actions on corporate R&D investment,as well as the effect of financing constraints and government subsidies on R&D investment.The paper draws the following conclusions:(1)China's listed companies face serious financing difficulties,financing constraints inhibit corporate R&D activities;(2)government subsidies significantly improve the level of R&D,and financing constraints in the relationship between government subsidies and R&D investment The weakening regulation;(3)The sub-sample test found that the degree of government intervention in SMEs and mature enterprises is deeper,and the financing constraints of SMEs and young companies are more prominent.(4)Further research found that in the state-owned enterprise group,enterprises face lower sensitivity to financing constraints.(5)By grouping the industries,we found that companies in high-tech industries have lower levels of financing constraints than non-high-tech companies.