Research On The Impact Of Enterprise Innovation Capability On Financial Performance

In the new wave of technological revolution,innovation has become the driving force for development.The "14th Five-Year Plan" emphasizes the need to continue to deepen the reform of the science and technology system and further improve the national system of science and technology governance.As an important innovation subject in the new round of technological revolution,enterprises play an irreplaceable role in decision-making for technological innovation,R&D investment,the formation of research organizations,and the transformation of achievements.By improving their innovation capacity,changing innovation mechanisms,combining market demand,and establishing a reasonable reward mechanism,enterprises can obtain stronger market competitiveness,which helps to improve their financial performance.It can be concluded that enterprise innovation capacity is of great significance in improving its financial performance.To explore this issue further,this article divides enterprise innovation capacity into "substantive innovation" and "strategic innovation" based on different innovation behaviors of enterprises,and examines the impact of enterprise innovation capacity on financial performance from two dimensions of "substantive innovation" and "strategic innovation".Furthermore,considering that enterprises face high risks and long cycles in their innovation activities,and have problems such as technology spillovers and uncertain returns,it is urgent to have a knowledge protection system to strengthen intellectual property protection.Strengthening intellectual property protection can change the perception of enterprise managers about the cost and benefits of disclosing innovation information,enable enterprises to obtain certain technology monopoly profits,and increase their financial performance.However,it should be noted that when the level of intellectual property protection is low,the technological innovation achievements of enterprises are easily copied and imitated by third parties,seriously weakening the motivation of enterprise innovators.Overly strict intellectual property protection may also lead to enterprises relying on their original innovation achievements to create technological monopolies,which seriously affects the market competition environment and is not conducive to creating a good innovation environment for enterprises.Therefore,too low or too high intellectual property protection may not be conducive to enterprise innovation activities and may weaken their competitiveness in the market,adversely affecting their business performance.Based on the Schumpeterian innovation theory,performance evaluation theory,and information asymmetry theory,this paper examines the effect of "substantive innovation" and "strategic innovation" on the financial performance of firms,as well as the role of intellectual property protection.Using panel data from Chinese A-share listed companies between 2012 and 2019,Stata15 software was employed to conduct descriptive statistical analysis,correlation analysis,and fixed-effect panel regression analysis to empirically test the moderating and threshold effects among variables.The following research conclusions were obtained:(1)Based on the benchmark regression,both "substantive innovation" and "strategic innovation" have a positive impact on financial performance.From the results of the moderation effect test,intellectual property protection strengthens the positive effect of "substantive innovation" and "strategic innovation" on financial performance,with a stronger effect observed for "substantive innovation."(2)From the threshold effect test results,"substantive innovation" and "strategic innovation" have passed a single threshold test for the financial performance of firms,and intellectual property protection exhibits a threshold effect between "substantive innovation," "strategic innovation," and financial performance.Before the threshold,the impact of "substantive innovation" and "strategic innovation" on financial performance was not significant,but after reaching the threshold,they became significantly positive.(3)Furthermore,it was found that the threshold value for intellectual property protection for "strategic innovation" is smaller than that for "substantive innovation," indicating that compared to "strategic innovation," "substantive innovation" requires a higher level of intellectual property protection to drive the financial performance of firms.This article integrates the study of corporate innovation capability,intellectual property protection,and corporate financial performance into a unified research framework,which provides valuable reference for enhancing corporate innovation capability.Clearly,the intellectual property protection system is a new perspective for enterprises to explore new driving forces for innovation development and promote economic growth.Additionally,the intellectual property protection system can also play an important role in creating a good corporate innovation environment and promoting the growth of corporate financial performance.Furthermore,it is also helpful for enterprises to find effective ways to promote the output of innovation results from the perspective of intellectual property protection system,attract more capitalists to invest in enterprises,promote "high-quality" "substantive innovation" activities,and ultimately boost corporate financial performance.