Research On The Impact Of Stock Liquidity On Innovation Performance Of High-Tech Firms

In 2022,China ranked 11 th in the Global Innovation Index,up one more position from last year,achieving a steady improvement for ten consecutive years,with innovation scores maintaining an average annual growth rate of 3.7% year-on-year,and the innovation drive increasingly becoming an important engine to drive China’s economic growth.Compared with the listed companies on the main board,most of the listed companies in China are high-tech enterprises,with smaller scale,shorter establishment and higher growth,etc.Relying on innovative R&D activities to gain core competitiveness in the market is the main strategic choice of GEM companies.As the core channel of the capital market,stock liquidity can reduce the cost of shareholders’ supervision of corporate executives through the governance mechanism,effectively alleviate the principal-agent problem and strengthen the role of shareholders’ supervision,and reduce the internal and external information asymmetry of enterprises by improving the information content of stock prices,thus achieving the purpose of effectively increasing the value of enterprises.In this context,can stock liquidity in China’s capital market influence the innovation behavior of high-tech enterprises and what is the intrinsic governance mechanism of such influence? A deeper understanding of this issue is important in both the existing theoretical and practical aspects of corporate innovation.In this paper,we investigate the impact of stock liquidity on innovation performance of high-tech firms from the perspective of stock liquidity of listed companies,and investigate the intrinsic mechanism of the impact.First,this paper summarizes the current research on stock liquidity and innovation performance,and finds that domestic and foreign scholars have different views on the impact of stock liquidity on innovation performance.The "disincentive theory".Second,this paper constructs an empirical model with two-way fixed effects supported by existing literature and relevant theories,controlling for time effects and individual firm effects,to explore the impact of stock liquidity on innovation performance of high-tech enterprises in China.This paper mainly explores the following two questions:(1)Can the stock liquidity of high-tech enterprises have an impact on the innovation performance of enterprises?(2)What is the mechanism of the impact of stock liquidity of high-tech enterprises on innovation performance,and is there any mediating variable?In the construction of the empirical model,this paper uses the unbalanced panel data of high-tech enterprises listed on A-shares in China from 2010 to 2020,the liquidity indicator is taken as a negative number for Ahumid indicator,the number of patents is taken as one plus log for the total number of patents and one plus log for the total number of utility model patents and invention patents respectively,and the patent The measure of patent quality is chosen as the proportion of the number of invention patents in the total number of patents.Based on the above information,this paper investigates the relationship between corporate innovation performance and stock liquidity,and further analyzes the performance of heterogeneity based on corporate patent perspective.In order to prove the reliability of the empirical model,this paper adopts three approaches in the robustness test,respectively.First,replacing the explanatory variables,the number of patent citations is selected to measure the patent quality of enterprises,and the natural logarithm of the sum of the number of inventions granted in the year and the number of utility models granted in the year is selected to measure the number of patents of enterprises.Second,the sample time interval is replaced,and the sub-sample from 2012 to 2020 is selected.Third,the clustering robust standard error regression is conducted,taking into account the differences in policy subsidies and management of enterprises in different regions,this paper conducts clustering robust standard error regression with the region as the label.This paper concludes that(1)stock liquidity in China’s capital market can improve the innovation performance of high-tech enterprises,specifically by increasing the number of patents but reducing the quality of patents;(2)the impact of stock liquidity on the innovation performance of high-tech enterprises is heterogeneous,for state-owned enterprises,stock liquidity does not have a strong role in promoting the quality of enterprise patents.For non-SOEs,stock liquidity boosts patent quantity but suppresses patent quality;(3)the shareholding ratio of institutional investors plays a part in mediating the effect of stock liquidity on patent quantity of high-tech firms.After a series of robustness and endogeneity tests,the conclusions of this paper still hold.In addition,based on the findings of this paper,the following policy recommendations are proposed:(1)guiding enterprises to attract institutional investors and strengthening investor education;(2)continuously improving and strengthening the capital market information disclosure system;and(3)enhancing the technological capability of enterprises and strengthening their innovation ability.This paper expands the research boundary of the relationship between stock liquidity and innovation performance of high-tech enterprises,enriches the relevant theoretical results to a certain extent,and provides new ideas for the study of stock liquidity and enterprise innovation performance.