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Abstract
Uncertainty in the business environment brings many challenges and opportunities to enterprises. This paper studies the impact of financial flexibility on innovation investment from the perspective of institutional ownership, using data of A-share high-tech enterprises from 2014 to 2018 as the empirical analysis sample. The results show that financial flexibility can promote innovation investment. Moreover, compared with state-owned enterprises, cash flexibility plays a more significant role in promoting non-stateowned enterprises, while debt flexibility only promotes innovation investment in non-state-owned enterprises. Through further research, it is found that the size of institutional investors’ shareholding has the positive moderating effect on the relationship between financial flexibility and innovation investment. In addition, non-independent institutional investors’ shareholding plays a negative role in regulating the impact of financial flexibility on innovation investment.
Highlights
With the increasingly severe international political landscape, the economy and trade of various countries are closely linked
The results show that debt flexibility has a significant role in promoting innovation investment in non-state-owned enterprises, but it has no significant effect in state-owned enterprises
This paper studies the impact of the financial flexibility of high-tech enterprises on innovation investment from the perspective of institutional ownership
Summary
With the increasingly severe international political landscape, the economy and trade of various countries are closely linked. In order to ensure the normal progress of innovation investment activities in the external economic turmoil, the financial flexibility of high-tech enterprises has become more and more important. In such cases, it is critical to study how financial flexibility affects innovation investment. Considering that the reform and opening up of the financial market makes institutional investors play an important role in the capital market and corporate governance, this paper combines institutional investors, financial flexibility and innovation investment for research, which has certain theoretical and practical significance. The research results of this paper can remind companies to attach importance to the application of financial flexibility and help companies better identify the governance role played by institutional investors, so as to cope with the risks and opportunities brought by environmental changes
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