Research On The Impact Of Innovation Expectation Surplus On The Cost Of Equity Financing

In the era of rapid development of science and technology,high-level innovation ability is a core competitive advantage for enterprises,which helps improve their performance and puts them in a leading position in the fierce market competition.Currently,the country has launched a series of tax incentives and policy subsidies to vigorously support enterprise innovation,setting off a wave of "mass entrepreneurship and innovation".In China’s capital market,when investors make investment decisions,they not only rely on the operating conditions of enterprises,but also focus on popular "theme stocks".In today’s society where innovation is booming,investors are vigorously pursuing companies with strong innovation capabilities.So,when the actual innovation performance of an enterprise is higher than the level of innovation expectations,which means that there is an innovation expectation surplus,can investors timely and accurately pay attention to this information reflecting the high competitiveness of the enterprise in the vast amount of information,thereby affecting investors’ behavioral decisions? In addition,in the fierce competition in the product market,can the innovation expectation surplus change the innovation information disclosure strategy of enterprises,and whether it is more difficult for investors to identify the innovation expectation surplus,thereby affecting the equity financing costs of enterprises? In the context of comprehensively deepening the innovation driven development strategy of the country,the above practical issues need to be explored and studied urgently.Based on this,this thesis selects the sample data of non-financial listed companies in Shanghai and Shenzhen A-shares from 2009 to 2021 as the research object to explore the impact of innovation expectation surplus on equity financing costs,analyze the intermediary role of investor attention,and further explore the regulatory effect of product market competition on the relationship between innovation expectation surplus and equity financing costs.The thesis found:(1)Innovation expectation surplus can reduce the cost of equity financing for enterprises.This is because the core competitive advantage generated by the innovation expectation surplus is beneficial for enterprises to optimize production processes,improve production efficiency,and reduce production costs.The leading position of enterprises in the market reduces the risk compensation demanded by investors,and the cost of equity financing decreases accordingly.(2)The intermediary test found that the innovation expectation surplus reduces the cost of equity financing by increasing investor attention.As a valuable non-financial information,the transmission of positive signals has attracted investors’ attention,and the expected return required by investors has decreased.(3)Product market competition weakens the effect of innovation expectation surplus on reducing equity financing costs.In an overly competitive environment,on the one hand,companies will disclose less information related to innovation to prevent competitors from copying innovative achievements;On the other hand,it is increasingly difficult for investors to accurately identify innovation expectation surpluses in a timely manner from massive amounts of information,ultimately weakening the effect of innovation expectation surpluses on reducing equity financing costs.This thesis helps listed companies focus on the innovation capabilities of the same industry,recognize the important value of non-financial information such as innovation expectation surplus,and promote continuous research and innovation to maintain market leadership.It provides investors with a new decision-making indicator,the innovation expectation surplus,to identify truly innovative enterprises and guide them to pay attention to the environment in which they are located when making investment decisions.It provides a reference for the government to use the innovation expectation surplus to implement measures such as innovation subsidies and tax exemptions,and promotes the government to continuously improve the institutional provisions for innovation information disclosure,ultimately helping the country deepen innovation driven high-quality development.