Research On The Impact Of Urban Commercial Bank Establishment On Enterprise Innovation Investment

Since 2017,China’s economic growth has shifted from a factor and investment-led model to capital-driven factor investment,complemented by independent innovation,with innovation becoming the key for China to move to the middle and high end of the global value chain and seek new points of economic growth.In fact,the 18th Party Congress has clearly put forward that science and technology is the strategic core for improving China’s social productivity and comprehensive national strength,and that science and technology innovation should be made the centre of the overall national development,and that we should adhere to the independent innovation path with Chinese characteristics and implement the innovation-driven development strategy.According to the report of the 19th National Congress and the report of the 20th National Congress,the innovation-driven development strategy should be implemented in depth and accelerated.Innovation is the main driving force of development,and enterprises are the main drivers of creativity and innovation.The key role of enterprises in innovation is determined by the law of historical development,the law of the market and the law of scientific and technological innovation,and is the inevitable result of the qualitative development of China’s economy and society.However,in China,there has long been a mismatch between financial market reforms and economic development,resulting in a certain mismatch of financial resources in China and a wide variation in the availability of credit between enterprises,which in turn affects their investment in innovation and R&D.In an imperfect financial market,firms with less access to capital may be less able to choose the best investment decisions and thus invest less in innovation.In order to fundamentally address this misallocation of financial resources,it is necessary to further develop small and medium-sized financial institutions,establish a sound financial system and deepen the reform of the financial system.At the same time,urban commercial banks,as small and medium-sized financial institutions with local characteristics,are an important part of the reform of China’s financial system.The establishment of urban commercial banks has further improved China’s financial system.In fact,urban credit cooperatives were the predecessors of urban commercial banks,which were initially established to reduce the financial risks of urban credit cooperatives and to gradually introduce long-term risk prevention mechanisms.After the restructuring of urban credit unions,the reform and development policy of market orientation and "serving the local economy" was adopted.This paper examines whether and how the establishment of urban credit unions has increased investment in corporate innovation,taking advantage of their ’agglomeration’ and’gradual diffusion’ characteristics as an almost natural experiment.This paper focuses on the impact of the establishment of urban commercial banks on corporate innovation investment.Firstly,this paper summarises and summarises the relevant literature and theories on urban commercial banks and corporate innovation investment,and establishes the research framework of this paper;secondly,it summarises the development and growth process of urban commercial banks,analyses the current situation of corporate innovation in China,and puts forward the research hypotheses of this paper;then,this paper uses the China Urban Statistical Yearbook,the China Industrial Enterprise Database 1998-2007 and the 2008-2008",Guotai Junan data is from 2020 to and after passing the smooth trend test,the asymptotic DID model is used to test the main research hypothesis of this paper;then,the reliability of the empirical results of this paper is tested by placebo test and robustness test,and the heterogeneous effects of the establishment of urban commercial banks on the innovation promotion effect of state-owned enterprises and non-state-owned enterprises are analysed;finally,the findings are summarised and policy conclusions are proposed based on the findings of this paper.Finally,the conclusions are summarised and policy implications based on the findings of this paper are presented.The empirical analysis conducted in this paper shows that the establishment of city commercial banks significantly increases firms’ investment in innovation,suggesting that the establishment of city commercial banks does have an innovation-promoting effect on firms.The results of the mechanism test suggest that the innovation-promoting effect of city commercial banks is mainly achieved by increasing the supply of credit to firms.In addition,the heterogeneity analysis conducted in this paper suggests that the creation of city commercial banks has a greater impact on innovation in state-owned enterprises than the creation of city commercial banks has on non-state-owned enterprises.Finally,the paper concludes with the following policy recommendations:further strengthening the creation of urban commercial banks,improving the financing environment for enterprises,and establishing and improving the credit management system for enterprises.