Research on the Relationship Between Institutional Investor Network, Government R&D Subsidy and Corporate R&D Investment: Evidence from China

Abstract

This paper studies the relationship between institutional investor network, government subsidy and R&D investment in Chinese market. This paper selects the data of A-share listed companies from 2015 to 2020 as samples, and uses UCIENT and Stata to process and analyze the data. In this study, companies in the financial sector were excluded to avoid cross-pollination. Through empirical analysis, the research results show that the higher the degree of institutional investors' network centrality, the higher the R&D investment of enterprises. This means that a well-positioned institutional investor network can obtain more professional, high-value information, and promote corporate R&D investment through joint pressure and voting by institutional investors. In addition, this study finds that government subsidies have an incentive effect on corporate R&D investment. Further analysis verifies the moderating effect of government R&D subsidies on institutional investor network and firm R&D investment. The finding shows that government subsidies can improve the promotion effect of institutional investor network location on firm R&D investment.