The Impact Of Enterprise Innovation On Business Performance And Stock Returns

In recent years,innovation has gradually become the focus of people’s attention.Innovation,as a challenging activity,has been highly valued by contemporary people.Under the background of globalization,with the improvement of information in China,people are more likely to accept new things.The number of patents representing the innovation ability of enterprises is increasing year by year.It is self-evident that innovation brings benefits to people,but there are still huge challenges and pressures to encourage innovation at the enterprise level.Whether the innovation ability of enterprises can improve enterprises performance level and value has been questioned.Innovation activities have certain risks,which require a large amount of capital and a long wait.Most people are confused about whether it is worthwhile to invest the capital in research and development activities.At the same time,the principal-agent problem is particularly prominent.Most people are worried about whether it is worthwhile to invest in R&D activities.At the same time,the principal agent problem is particularly prominent.Therefore,the discussion of innovation related issues has iInportant research value and practical significance for the development of Chinese enterprises.This paper analyses the relationship bet.Areen enterprise innovation and enterprise operating performance,and holds that the perspective of-enterprise innovation ability can be used as one of the supplementary basis to judge the intrinsic value of an enterprise.Based on value investment theory,the signal theory and Herding theory,the stock price fluctuates with the intrinsic value of the enterprise,which is affected by the financial condition,profit prospects and other factors.This paper believes that people can identify the enterprises with strong innovation ability,which has high expected future value in the hearts of investors,so that the innovation activities can improve the stock returns of enterprises to a certain extent.This part is helpful for investors to conduct a more comprehensive and rational analysis of the basic information of Listed Companies in China.High-tech industry is an important industry in the development of science and technology in our country.Its competition degree is far greater than that of other industries.Under different competition degree,enterprise innovation may affect enterprise operating performance and stock returms.Hence,comparing the enterprise business performance and investment value brought by the innovation of high-tech industry and traditional industry is of great significance to the development of science and technology in China.On the basis of collating the existing literature at home and abroad,through the combination of-theory and practice,this paper discusses the impact of corporate innovation on business perf-ormance and stock returns.This paper selects panel data of A-share market in China from 2009 to 2017 as the research object for empirical research.The data mainly come from Wind database,Cathay database and Patent Website of State Intellectual Property Office.Using the principal component analysis method to synthesize the measurement index of innovation capability and the two-way fixed effect model,the following problems are analyzed.Firstly,whether there is a significant positive correlation between enterprise innovation and enterprise financial performance,and whether the promotion of enterprise innovation and enterprise financial performance will be affected by the degree of industry competition,which affects the high-tech and non-high-tech industries.Is this effect the same in high-tech and non-high-tech industries?Secondly,whether there is a clear positive correlation between enterprise innovation and stock returns,whether enterprise innovation and stock returns will also be affected by the degree of industry competition,whether the impact is different in high-tech and non-high-tech industries.In order to test the reliability of the conclusion,this paper uses the method of replacing variables to test the robustness,and adds the lag term of innovation agent variables to test the endogeneity.According to the results of empirical analysis,it can be seen that there is a significant positive correlation between enterprise innovation and enterprise business performance,indicating that enterprise innovation promotes the increase of enterprise business performance;the interaction between enterprise innovation·and Herfindahl Hirschman index is significantly positive under the overall regression,indicating that the degree of industry colnpetition has a moderating effect on the relationship between innovation ability and enterprise business performance and the improvement of.industry competition level will inhibit the improvement of enterprise financial performance by innovation.According to the regression results of grouping regression,it can be seen that the regression coefficient of interaction in high-tech industry is positive,but not in non-high-tech industry.In the regression between innovation ability and stock returns,there is a significant positive correlation between innovation ability and stock returns,which indicates that there is a positive impact between them.Similarly,the regression coefficient of the interaction between innovation and Herfindahl Hirschman index is significantly positive,which indicates that the interaction terms have a significant regulatory effect on the relationship between innovation ability and stock returms,and increasing the level of industry competition will inhibit the positive correlation between innovation capabilities and stock returns.In grouping regression,the restraining effect of high-tech industry is significant,while the moderating effect of non-high-tech industry is not significant.According to the results of robustness test and endogeneity,the consistency of the above conclusions can be proved.Finally,according to the above regression results,this paper puts forward some policy suggestions for enterprise innovation,high-tech industry and traditional industry.In the process of this study,the innovations are different from those in the past.This paper discusses the influence of enterprise innovation on enterprise operating performance and stock returns and shows that innovation ability can provide some reference for investment decision in investment process.In this paper,by adding the interaction item between innovation ability and market competition degree,the moderating effect of market competition degree on innovation ability,business performance and stock return was investigated respectively.On this basis,this paper examines the impact of interaction items on business performance and stock returns in high-tech and non-high-tech industries respectively.