The Impact Of Financial Asset Allocation On Innovation Inputs

The report of the 20 th Party Congress clearly states that innovation should occupy a central position in the overall situation of China’s modernization.To this end,China should continue to increase its investment in innovation and strive to achieve high-quality economic development.However,along with the gradual decline in profitability of the real economy,companies are mostly cautious about innovation,which in turn has led to a reduction in the level of corporate investment in innovation.On the other hand,the financial markets are developing rapidly and getting hotter at this time.In recent years,driven by high financial returns,most companies have turned their attention to the financial sector,and the allocation of financial assets has become a common phenomenon.The contrast between the ’cold’ real economy and the ’hot’ financial market is stark.In this critical period of China’s economic transformation,China should give full play to the important role of innovation,and it is therefore necessary to explore in depth the impact of financial asset allocation on innovation investment.Moreover,as an important part of corporate governance,the equity structure can have an impact on the monitoring and decisionmaking mechanisms of enterprises,which in turn can influence the level of innovation investment.It is therefore also interesting to add equity structure to the study of the relationship between the two.Through reading and combing related literature,this paper takes the theory of precautionary savings theory,investment substitution theory,principal-agent theory,incentive theory,financing constraint theory and financing priority theory as the theoretical basis,and selects manufacturing enterprises listed in Shanghai and Shenzhen A-shares from 2012-2021 as the research object.Through theoretical analysis and empirical analysis,it verifies the impact of financial asset allocation on innovation investment and proves.The moderating role of shareholding structure between the two is demonstrated.An innovative threshold model is also used to verify the impact of financial asset allocation on innovation investment under different equity structures.The results show that: financial asset allocation reduces the level of innovation investment;long-term financial asset allocation has a more significant inhibitory effect on innovation investment than short-term financial asset allocation;equity balance can inhibit the negative effect of financial asset allocation on innovation investment;and management shareholding can also weaken the negative effect of financial asset allocation on innovation investment.Based on the above findings,this paper puts forward relevant suggestions: at the enterprise level,enterprises should be rational in their financial investment behaviour,fully disclose their financial asset allocation,and reasonably allocate financial assets with different liquidity according to their needs;enterprises can also improve the degree of equity checks and balances,build a reasonable monitoring system,and formulate an effective management equity incentive system to enhance the level of innovation investment.At the government level,government departments should strengthen regulation of the financial market and strive to improve the financial market management system to curb financial speculation;at the same time,they should improve the profitability of real business and lower the return on investment in the financial sector;and strive to improve the problem of financing difficulties.