Abstract
This study empirically examined the impact of financing innovation on technological innovation efficiency of select internet companies, that were affiliated with China between 2008 and 2017. Analysis was based on their patent and annual report data and used multiple input-output SFA model, system GMM, and panel fixed-effect model. The results are as follows. (1) There is significant variation in overall technological innovation efficiency of listed companies in the internet industry, and there is a downward trend. The technological innovation efficiency of business that use financing innovation methods is higher than those that do not. (2) The number of patents and intangible capital investment of internet businesses increase obviously every year, but there is no corresponding increase in the efficiency of technological innovation, and little intangible capital investment of non-financing innovation businesses. Thus, determining how to effectively improve the overall quality of patents and the efficiency of intangible capital investment is essential to improve the efficiency of technological innovation for Chinese internet businesses. (3) There is a term mismatch in the investment and financing of internet businesses in China. The financing structure between the financing innovation and non-financing innovation businesses has different impacts on the efficiency of technological innovation. And nowadays, more financing channels are short-term debt financing channels which invest in projects to improve the efficiency of technological innovation due to the pressure of debt repayment and the need to protect shareholders' interests. (4) In the panel regression, the coefficients of Icd and Roa are significantly negative, suggesting that the investment efficiency of internet businesses needs to be improved.
Highlights
With the continuous upgrading and development of the internet industry and its deepening integration with economy and society, the internet has become the main driving force of global economic growth
(2) The number of patents and intangible capital investment of internet businesses increase obviously every year, but there is no corresponding increase in the efficiency of technological innovation, and little intangible capital investment of non-financing innovation businesses
The contributions of this work are as follows: (1) by manually sorting the practical patent data of Chinese internet companies, we examined whether financing innovation affected the efficiency of technological innovation based on the theories of financing constraints and innovation value
Summary
With the continuous upgrading and development of the internet industry and its deepening integration with economy and society, the internet has become the main driving force of global economic growth. With the fundamental transformation of internet businesses from material-intensive to intangible-intensive, Chinese internet companies have obtained long-term financial support through financing innovation. This increase of intangible capital investment has failed to improve the overall efficiency of technological innovation for internet businesses (Fig 1). The contributions of this work are as follows: (1) by manually sorting the practical patent data of Chinese internet companies, we examined whether financing innovation affected the efficiency of technological innovation based on the theories of financing constraints and innovation value. (2) Previous studies of internet companies mainly focused on the measurement of innovation efficiency, ignoring the potential impacts of intangible capital investment and financing innovation.
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