Research On The Impact Of Internal Control On Enterprise Innovation

The Party’s 14 th Five-Year Plan makes it clear that China’s future development direction needs to shift from quantity to quantity.In the process of gradually moving towards high-quality development,traditional economic growth drivers can no longer meet the needs of China’s economic development,and innovation is the key to cultivating new growth drivers.In order to achieve the goal of a strong country in science and technology,it is necessary to increase investment in innovation and pay attention to improving innovation output,and make a deep understanding of the key role played by innovation in the social development and economic growth of our country.In the process of carrying out innovation activities,enterprises need supervision and management mechanism to provide stable internal environment for innovation,and internal control,as a risk control mechanism in the governance system,can guarantee the smooth implementation of innovation projects.Managers believe that the establishment of internal control system will control all high-risk activities of the enterprise,so the enterprise will slow down the construction of internal control in order to improve innovation.There is a contradiction between the two.However,the reality is that the enterprise’s internal control level is increasing,while the innovation ability is also growing,and there is no conflict between the two.Internal control can provide enough risk space for innovation and a good environment for innovation,and there is the possibility of promotion.In this context,it is of great practical significance to clarify the relationship between internal control and enterprise innovation and to distinguish the difference between input and output.In the process of improving innovation,there will be insufficient innovation funds or high enterprise risk,which will affect enterprise innovation.Funding is an important guarantee for innovation activities.The problem of insufficient funding for innovation can be solved by supplementing external financing and government R&D subsidies.Innovation activities require enterprises to have enough risk space,but the risk tolerance of enterprises is limited,daily business activities have business risks,excessive debt capital and financial transactions have financial risks,will compress the risk space of innovation efficiency,and affect enterprise innovation.Can the problems faced by innovation be solved or mitigated by internal control? Are capital and risk problems the function path of internal control affecting enterprise innovation? In addition,is there a difference in the impact between different paths?Furthermore,for enterprises with different property rights,technical characteristics,scale and life cycle,is there any difference in the degree of influence of internal control on enterprise innovation? Exploration and answers to the above questions will not only help to sort out and conclude the existing research context,but also have high practical reference value for Chinese enterprises to formulate internal control system and improve innovation capability.Based on the above research background,this paper takes China’s A-share listed companies from 2011 to 2021 as research samples,analyzes the status quo of internal control and enterprise innovation,establishes A multiple regression model to investigate the correlation between variables,and draws the following conclusions:(1)There is a positive U-shaped relationship between internal control and enterprise innovation input and output,and innovation output has higher requirements for enterprise internal control,and the influence of internal control on innovation output is greater than that of innovation input.(2)Financing constraints,R&D subsidies,operating risks and financial risks all have partial mediating effects.Internal control promotes enterprise innovation by easing financing constraints,improving R&D subsidies and effectively controlling risks.(3)The mediating effect of R&D subsidies is the highest in both innovation input and output,and the capital problem is the core issue affecting innovation activities.The influence of risk problem on innovation output activities is higher than that on innovation input activities.(4)Further research shows that,compared with non-high-tech enterprises,internal control of high-tech enterprises has a greater impact on enterprise innovation;Compared with state-owned enterprises,the internal control of non-state-owned enterprises has a greater impact on enterprise innovation.Compared with small-scale enterprises,the internal control of large-scale enterprises has a greater impact on enterprise innovation.Compared with mature and declining enterprises,the internal control of growing enterprises has a greater impact on innovation input.Compared with the growth and decline period,the internal control of mature enterprises has a greater impact on innovation output.The research results can provide decision-making basis for the management to make targeted internal control system and improve the overall innovation level of enterprises.