The influence of financial asset allocation on the innovation and investment of high-tech enterprises

Abstract

This study's results suggest that financial asset allocation leads to increased innovation investment by high-tech enterprises. The allocation of different types of financial assets produces opposite impact results. Short-term financial assets inhibit innovation investment by high-tech enterprises, while the allocation of long-term financial assets promotes innovation investment. This finding remains robust after endogeneity and robustness tests. Further analyzing the channels through which it works shows that financial asset allocation promotes enterprises’ innovation investment by increasing their risk tolerance. Furthermore, a subregional sample regression finds that the above promotion is particularly pronounced in the eastern region.