A Study On The Market Reaction To Chinese Publicly Listed Manufacturing Firms' R&D Cooperation

R&D cooperation,one of the crucial strategic investment decisions,impacts companies' innovation capability and performance,and plays a vital role in influencing the companies' market value.With the rapid development of the knowledge economy,technological innovation requires more and more knowledge base for enterprises,R&D cooperation gradually evolves into a process of knowledge acquisition and knowledge creation.However,most of China's manufacturing companies have weak R&D capabilities,lack of management experience,and face high risks of innovation spillovers in the process of R&D cooperation.This hinders the process of knowledge sharing and transfer in cooperation,and weakens the effect of enterprises' absorption and utilization of alliance knowledge.How to profit from external innovative knowledge sources to enhance innovation benefit has become a core issue that Chinese industry and academia have paid close attention to and are committed to solving.Drawing upon the contingency theory,integrating the relevant theories of knowledge absorption capacity and cooperative knowledge sharing,and exploring the interactive effects of internal R&D and external R&D cooperation.This study investigates the stock market response to the R&D cooperation announcement.The impacts of R&D investment on the stock market value,and the moderating effects of formal governance mechanisms(equity alliance governance mechanism and co-patenting arrangement)and competitive alliance on the relationship between R&D investment and the stock market value are also investigated.The event study of the R&D cooperation announcement made by Chinese publicly listed manufacturing firms in A-shares suggests that:(1)Firm's abnormal stock returns will be positive when announcing R&D cooperation.(2)R&D investment have a positive impact on the abnormal stock returns.(3)Equity alliance governance mechanism brings higher stock abnormal returns,and positively moderate this relationship between the R&D investment and cumulative abnormal returns.(4)Co-patenting arrangement brings higher stock abnormal returns,and positively moderate this relationship between the R&D investment and cumulative abnormal returns.(5)The moderating effect of the co-patenting arrangement is stronger than the equity alliance governance mechanism.(6)Competitive alliance brings lower stock abnormal returns,and negatively moderate this relationship between the R&D investment and cumulative abnormal returns.This study explores the important factors that influence the creation of firm value in the collaborative innovation of Chinese companies,enriches the existing literature exploring the relationship between R&D investment and stock market value.This study also discloses the boundary conditions of this effect.Moreover,the effects of two types of formal governance mechanism are explored.This article also provides decision-making reference for investors in the Chinese market to invest and how managers can effectively use and manage R & D alliances to enhance innovation performance.