| Nowadays,international competition is increasingly fierce,and innovation plays a more and more important role in promoting economic development.The impact of capital account openness on firm innovation involves not only the choice and adjustment of macro policies of the country,but also the formulation of the development strategies of the micro market entities.In order to promote firm innovation and enhance the vitality of economic development,whether the government should choose to speed up the capital account openness or strengthen capital controls has been widely discussed by academia and industry.We combine macroeconomic policy with micro firm innovation to explore the gains and pains of capital account openness for firm innovation in China,and try to put forward policy suggestions accordingly.Based on the existing researches,the possible impact of capital account openness on firm innovation is summarized,and abundant empirical tests are carried out.First,using the data of non-financial and non-ST public firms in China from 1998 to 2015,we use the panel fixed effect model to analyze the impact of capital account openness on innovation activities of Chinese firms.The results show that capital account openness has a positive effect on the growth of firm innovation.Next,the endogenous issue is discussed and a variety of robustness tests are conducted.The results support the promotion effect of capital account openness on innovation.On this basis,we further analyze the innovation quality,enterprise size and ownership,industry heterogeneity,corporate governance and financial constraints.The conclusions are as follows.Firstly,capital account openness has a significant promotion effect on the innovation quality of Chinese firms.Secondly,capital account openness has significant innovation-promotion effect for large firms and state-owned firms,which are the real beneficiaries of capital account openness,while the innovation of small and mediumsized firms and non-state-owned firms has not been significantly affected.Thus,the Schumpeterian Hypothesis applies.Thirdly,the industry heterogeneity has an important influence on the relationship between capital account openness and innovation.During the process of capital account openness,only manufacturing firms’ innovation has experienced substantial growth.Fourthly,capital account openness can improve the corporate governance mechanism of Chinese firms,and then promote firm innovation.Fifthly,capital account openness can ease the financial constraints of Chinese firms,reduce capital costs and then release the innovation vitality of firms.The findings have profound significance in terms of further reform of capital account and the promotion of the two-way openness of financial industry in a rational and orderly way.Firstly,considering the promotion effect of capital account openness on innovation,as well as the strong impetus of science and technology to high-quality economic development,the system construction should be strengthened so as to promote the openness of the capital account firmly.Secondly,the government should create a good innovation environment for firms,so that the benefits of capital account openness can be transmitted to all market participants.Finally,it is necessary to correctly understand and prudently control the possible fluctuations of China’s domestic real economy caused by capital account openness,and reasonably guide the crossborder capital flows. |
PDF Full Text Request