Persistent Innovation And Corporate Financial Performance

As China attaches more and more importance to innovation,firms are also looking for innovative modes to realize their own development in the innovation wave.Influenced by the economic,policy environment and their unique conditions,the innovation performance of firms is also different.In the previous studies on innovation,scholars discussed the factors that stimulate innovation and the influence of innovation on the subsequent development of firms.On the basis of this kind of studies,scholars find that innovation without persistence cannot bring sustainable benefits to firms.The lack of innovation persistence hinders the improvement of firms' subsequent operating performance and the improvement of market performance.Therefore,it is necessary to further clarify the mechanism of persistent innovation on corporate financial performance in theory.Current studies on persistent innovation mainly focuses on the measurement of innovation persistence and the construction of innovation performance evaluation system.The follow-up research on the performance of persistent innovation firms is rare and generally focuses on a certain industry,such as high-tech industry and pharmaceutical industry,with a small sample range.Based on the panel data of China's manufacturing firms from 1998 to 2009,this paper makes a theoretical and empirical analysis on the relationship between firm innovation,persistent innovation and corporate financial performance,so as to provide some ideas for China's innovative development.On the basis of summarizing the previous studies,this paper finds out the deficiencies of the current research and fills in the gaps,and identifies the two research topics of this paper:(1)the impact of firm innovation on the current performance of firms;(2)the impact of persistent innovation on corporate financial performance.Through the construction of theoretical framework and empirical test,this paper draws the following three main conclusions:(1)firm innovation can significantly improve the current financial performance of firms;(2)The promotion effect of firm innovation on corporate financial performance is weakened year by yearand disappears in the third year after innovation;(3)the higher the level of persistent innovation of firms,the better the financial performance.In addition,this paper also analyzes the relationship between innovation,persistent innovation and enterprise performance from the perspectives of patent quality,enterprise location and enterprise ownership differences.After confirming the positive relationship between firm innovation,persistent innovation and corporate financial performance,this paper provides Suggestions on the construction of Chinese firm innovation ideas and prospects for the future direction of research.