Economic Uncertainty?Inernal Capital Market And R&D Investment

After the reform and opening up,China has realized a “Chinese myth” by its rapid economic growth over 40 years and become the world's second largest economy by continuously surpassing other countries.But China has paid a high price for this.Now it is in a period of new economic normality.Its economic development mode needs to be changed for adapting to this period and maintaining the sound economic development of the country,so as to realize the innovative iteration of the economic development model.For this issue,the 19 th National Congress of the Communist Party of China held on October 18,2017 pointed out,“Innovation is the primary motivation for the sustainable and healthy development of national economy,the motive power for the optimization of the economic structure,and an important lever for pushing the upgrading of industrial structure.” Research and development(R&D)investment,as the foundation and precondition of independent innovation of enterprises,has become an important strategic decision-making behavior that affects the sustainable economic development of China.R&D investment is limited by imperfect capital market,asymmetric information and other objective factors,and can be better developed and explored than ordinary investment.As a result,it lasts for longer time and faces greater risks,which also makes it more susceptible to uncertainty factors.China is now in a critical period of comprehensively deepening reform,economic development transformation,and replacement of old and new kinetic energy.The corporate R&D investment is surely very important.But unfortunately,there still exist many factors that restrict economic transformation and upgrading even in the period of new economic normality,and uncertainty factors in the so-called “stability”.In particular,the Sino-US trade friction issue after Trump held power and the COVID-19 epidemic spreading in the whole world have increased uncertainties at the macroeconomic level.Therefore,it is extremely urgent to explore the interaction relationship and mechanism between macroeconomic uncertainty and R&D investment.The group's internal capital market,as an enterprise resource integration and reallocation center,is undoubtedly one of the most critical factors among the many influence factors for R & D investment.In the context of macroeconomic uncertainty,whether the interaction relationship with R&D investment will be distorted is a question that needs to be answered.Therefore,based on the existing research,the macroeconomic uncertainty is taken as an entry point in this study,to conduct an empirical survey on the impact of macroeconomic uncertainty on corporate R&D investment.By taking the internal capital market as a moderating variable,the thesis deeply explore whether there exist significant differences in the relationship between R&D investment behavior under the control of internal capital market and macroeconomic uncertainty.In this thesis,China's macroeconomic uncertainty,the group's internal capital market and the current situation of R&D investment are firstly introduced,and the mechanism of action among the three aspects is analyzed.Secondly,macroeconomic data and micro-enterprise data are used to empirically study the interaction relationship among them.It's expected to provide some constructive suggestion for promoting enterprise innovation and industrial transformation & upgrading in China.The following conclusions are made in this thesis.(1)Macroeconomic uncertainty will significantly inhibit corporate R&D investment,especially in state-owned enterprises.(2)R&D investment can be promoted by the existence and activity of the group's internal capital market,which is more obvious in non-state-owned enterprises.(3)The group's internal capital market as a moderating variable can alleviate the inhibitory effect of macroeconomic uncertainty on corporate R&D investment,especially in non-state-owned enterprises.Based on the existing literature,this thesis selected the key factors(uncertainties of macro-economy and the group's internal capital market)from numerous internal and external influence factors,to analyze its influence on R&D investment of enterprises.This thesis has not only provided some reliable empirical evidences for related studies,but also offered a relatively novel research perspective.