Research On The Impact Of Business Environment And R&D Investment On The Financial Performance Of GEM Companies

In 2018,the First Executive meeting of The State Council proposed that "optimizing the business environment is to liberate productivity and competitiveness".In 2019,the State issued the Regulations on Optimizing the Business Environment.These measures show that China attaches great importance to optimizing the business environment.At the same time,as GEM companies engaged in high-tech business with high growth,they need innovation,because innovation is not only conducive to forming core competitiveness of GEM companies,but also help them expand market share and effectively resist risks.Therefore,it is urgent to accelerate the technological innovation of GEM companies.However,technological innovation needs an appropriate growth environment,and the quality of the business environment will directly affect the enthusiasm for innovation and the company’s financial performance.Therefore,it is of great practical significance to investigate the impact of the business environment and the R&D investment of the core elements of technological innovation on the financial performance of GEM companies.This paper takes GEM companies from 2017 to 2019 as the research object and empirically studies the relationship between business environment,R&D investment and financial performance of GEM companies.First of all,transaction cost theory,resource dependence theory,information asymmetry theory and market failure theory are used to analyze the mechanism of the impact of business environment on corporate financial performance.Input-output theory and technology innovation theory are used to analyze the basis of the impact of R&D investment on corporate financial performance,on this basis,combing the related literature at home and abroad,put forward the research hypothesis;Secondly,referring to the research of scholars and institutions on the company’s financial performance and business environment,the company’s financial performance is divided into short-term financial performance and long-term financial performance in view of the possible lag in the impact of R&D investment on financial performance.Short-term financial performance is calculated by factor analysis,long-term financial performance is measured by market value index,and the business environment of each province is calculated by constructing the evaluation index system and using the entropy weight method to determine the weight.Thirdly,descriptive statistics,correlation analysis and collinearity test,Hierarchical Linear Model results analysis and robustness test were used for empirical analysis.The results show that the enhancement of R&D investment intensity negatively and positively affects the short-term and long-term financial performance of GEM companies;The business environment significantly promotes the long-term and short-term financial performance of GEM companies;Business environment moderates the relationship between R&D investment and GEM companies’ short-term financial performance.Finally,based on the empirical analysis results,countermeasures and suggestions are put forward to improve the financial performance of GEM companies from the company level and the government level.