The certification effect of government R&amp;D subsidies on innovative entrepreneurial firms’ access to bank finance: evidence from China

Li, Li; Chen, Jean; Gao, Hongli; Xie, Li

doi:10.1007/s11187-018-0024-6

Cited by 94 publications

(48 citation statements)

References 38 publications

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“…Our sample contains firms listed on two most important stock market boards in China that are designated primarily for entrepreneurial type high‐tech firms: the Shenzhen SME board and Growth Enterprises Market (GEM) board. The SME board established in 2004 is a part of the Shenzhen main‐board market and the GEM board opened in 2009 is the second‐board market in China (See Huang et al, 2016; Velamuri & Liu, 2017; and Li et al, 2019 for a review). We collect our data from China Stock Markets and Accounting Research (CSMAR) Database.…”

Section: Sample and Methodsmentioning

confidence: 99%

“…Statistics show that China contributes around 20% of global R&D investment, which is projected to overtake the USA by 2020 (Boeing, 2016). Around 75% of listed firms have received subsidies during the past decade and a dominant part of these subsidies are granted for R&D activities (Boeing, 2016; Li, Chen, Gao, & Xie, 2019). Moreover, a substantial portion of the government subsidy is going to the high‐tech inventive firms, which are the driving force of China's current technological trajectory (Boeing, 2016).…”

Section: Introductionmentioning

confidence: 99%

“…Government subsidies made up more than 50% of high‐tech R&D expenditure in China (Chen et al, 2018). According to these recent studies, from empirical identification perspective, conducting tests with Chinese high‐tech entrepreneurial firms allows us to utilize the high‐power setting of listed start‐up firms in China's weak corporate governance environment for which public subsidies are crucial to enhance high‐tech entrepreneurial firms' innovation capability (Huang et al, 2016; Boeing, 2016; Li et al, 2019). Majority of the previous research has not yet systematically accounted for potential moderating effect of corporate financial decisions on the subsidies‐R&D relationship in emerging markets like China.…”

Section: Introductionmentioning

confidence: 99%

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Corporate finance policies, subsidies and R&D: Evidence from China

Huang

Sattar

2020

Int. J Fin Econ

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This paper develops an agency theory based conceptual framework to investigate the interconnections among corporate finance policies, subsidies and R&D investment. We empirically test our predictions using a sample of listed high‐tech firms from China during 2007–2015. Our baseline results support a positive subsidies‐R&D relationship. Subsequent tests using non‐linear models further point out that this relationship is inverted U‐shaped. In line with our conceptual framework, we show that the marginal effect of subsidies is diminishing and turns negative particularly among firms with higher dividend payout, lower investment efficiency, and lesser cashflow constraints. These findings ascertain the importance of internal corporate governance structure in facilitating regulatory policy implementation and effectiveness.

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Section: Sample and Methodsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Corporate finance policies, subsidies and R&D: Evidence from China

Huang

Sattar

2020

Int. J Fin Econ

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“…Therefore, the government should subsidize emerging industrial enterprises with high employment and high creation potential to ensure their innovation input and encourage institutions and private investors to actively follow suit [38,39]. The significant certification effect of government subsidies makes getting government subsidies a legal strategy for enterprises to obtain more external capital [40,41], and also change the institutions' public opinion judgment and market expectation for listed companies. Therefore, this paper argues that the external capital market institutions will regard the government subsidies to enterprises as a macro policy signal to external investors and stakeholders, enabling the institutions to adjust their market expectations and public opinion analysis for enterprises accordingly, and affecting investors' investment and enterprise innovation input.…”

Section: Moderating Effect Of Government Subsidiesmentioning

confidence: 99%

Can the Gap and Rating of Market Expectation Promote Innovation Input of China Manufacturers?

Jiang

2020

Sustainability

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Under the strategic background of Made-in-China to Mind-in-China, how the capital market expectation affects enterprise innovation input has reached no coincident conclusion. This paper uses Chinese A-share manufacturing listed companies from 2010 to 2017 to investigate the internal mechanism among the gap and rating of market expectation and enterprise innovation input, and further explores the moderating effects of institutional coverage and government subsidies. The results show that: firstly, innovation input will first decrease and then increase with the market expectation gap increase. However, innovation input will first increase and then decrease with the market expectation rating increase. Secondly, when the institutional coverage and government subsidies increase, innovation input will remarkably transform from the first decrease and then increase into the first increase, then decrease with the market expectation gap increase. Finally, when institutional coverage is high and government subsidies are low, innovation input will remarkably transform from the first increase and then decrease into the first decrease, and then increase with the market expectation rating increases. These research findings can provide some academic support and policy references for managers to deal with effectively external performance pressures, institutional coverage, and optimize government subsidies to promote manufacturers’ innovation-driven upgrading.

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“…Results of empirical studies related to the effects of quality certification are different. Li et al (2018) argued about the effects of certification on reputation. The study of Rillo and Mijatovic (2016) highlighted the fact that quality certification is more important to the organizations from developing countries as it is connected with ''building of reputation''.…”

Section: Role Of Certification In Smesmentioning

confidence: 99%

The Acquiring of the Knowledge about Standards in the Digital Era

MijatoviĦ¹,

ToiĦ²,

JovanoviĦ³

2019

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The knowledge from external sources has been recognized as critical for improving the capabilities of small and medium enterprises (SMEs) to be competitive on the global market. The aim of this paper is to explore main factors which affect SMEs' choice of a dominant source for acquiring information and the knowledge about standards. The questionnaire survey research method was used to seek the response from representatives of 130 SMEs operating in Serbia. Our findings indicate four sourcesrelevant websites, services of consultants, inputs of customers as well as information received from business partners. Our results showed that larger SMEs, with a longer tradition in business, will have more chances to use Websites as a primary source for gaining knowledge about standards. Domestic SMEs shape their decisions to hire consultants predominantly because of a negative perception of standards. The usage of customer inputs as a dominant source for gaining information and transfer of knowledge about standards are influenced by SMEs' experience in business and negative perception of the benefits of standards. In the digital era, SMEs still suffer from a lack of resources or capabilities to use the Web and the Internet for acquiring information and knowledge about standards in the digital era.

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The certification effect of government R&D subsidies on innovative entrepreneurial firms’ access to bank finance: evidence from China

Cited by 94 publications

References 38 publications

Corporate finance policies, subsidies and R&D: Evidence from China

Corporate finance policies, subsidies and R&D: Evidence from China

Can the Gap and Rating of Market Expectation Promote Innovation Input of China Manufacturers?

The Acquiring of the Knowledge about Standards in the Digital Era

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