Exploring the impact of government subsidy and Ramp;D investment on financial competitiveness of Chinarsquo;s new energy listed companies: An empirical study
Highlights
bull;Ramp;D investment intensity has a significant positive correlation with the financial competitiveness, and it has a lag effect.
bull;The moderating role of the government subsidies is examined.
bull;Factor analysis is used to explore the calculation of financial competitiveness.
bull;First examining the effect of government subsidies in the new energy industry in China.
Abstract
In the environment where the traditional energy industry is declining and the new energy industry is developing rapidly, we collected the data from 98 new energy companies listed in Chinarsquo;s Shanghai and Shenzhen stock markets from 2012 to 2016 to conduct an empirical study to understand the relationship between their Ramp;D investment intensity and their corporate financial competitiveness. In addition, we looked at an issue of how the relationship is impacted by government subsidies. The research results show that the Ramp;D investment intensity has a significant positive correlation with the financial competitiveness of Chinarsquo;s new energy listed companies, and it has a lag effect. The current government subsidies have no significant moderating effect on the relationship between Ramp;D investment and
financial competitiveness. Based on the empirical study conducted, we propose that Chinarsquo;s new energy listed companies should increase Ramp;D investment, strengthen the
long-term budget management of Ramp;D investment, and increase government support and supervision in order to enhance financial competitiveness.
Keywords: Chinarsquo;s new energy listed company; Government subsidies
Ramp;D investment; Financial competitiveness
- Introduction
Innovation is the first driving force for development and the strategic support for building a modern economic system (Xi, 2017). Since the 18th National Congress, China has vigorously implemented an innovation-driven development strategy. The 19th National Congress continued to propose strengthening the construction of the national innovation system and strengthening strategic and technological forces (Xi, 2017). Scientific and technological innovation plays a vital role in building a well-off society in China.
According to the “Statistical Bulletin on Chinarsquo;s Science and Technology Funds”, in 2016, China invested a total of 1567.67 billion yuan in research and development (Ramp;D) investment, which was an increase of 10.6% over 2015, and the growth rate was 1.7 percentage points higher than that in 2015. Among them, corporate expenditures accounted for 77.5% which is the main body of enterprises in research and experimentation. The 19th National Congress of the Communist Party of China proposed to establish a technological innovation system with enterprises as the mainstay, market-oriented, and deep integration of production, education and research (Xi, 2017). Due to the increasingly fierce domestic and international market competition, technological innovation capability directly affects the competitiveness of enterprises. In recent years, the Chinese government has continuously strengthened its support for small and medium enterprisesrsquo; innovation and promoted transforming scientific and technological achievements into production. Therefore, there has been a widespread concern about whether Ramp;D investment representing the technological
innovation capability of enterprises improves the financial competitiveness of enterprises, and how government subsidies affect them.
The energy industry as a supporting industry has made an indelible contribution to Chinarsquo;s economic development. According to the BP World Energy Statistics Yearbook, Chinarsquo;s energy consumption accounted for 23% of global consumption in 2016 and is the worldrsquo;s largest energy consumer. However, with the sharp decline of fossil fuels and the increasingly serious environmental pollution, the development speed of the traditional energy industry has gradually slowed down, and the new energy industry with abundant resources and cleanliness has developed rapidly. In 2016, the worldrsquo;s renewable energy grew by 12% and continued to grow at the fastest rate. The new energy field has gradually become a key industry in the world for competing development.
This paper takes the listed companies in the new energy industry as the research object, empirically analyzes the impact of Ramp;D investment on the companyrsquo;s financial competitiveness, and studies the role of government subsidies for this impact. Finally it offers specific countermeasures and suggestions for the new energy industry.
- Related literature review and research hypothesis
2.1. Correlation between Ramp;D investment and current financial competitiveness
Enterprise financial competitiveness refers to a kind of competitiveness that is based on knowledge and innovation ability, and effectively integrates the ability of the financial capability system of the enterprise to benefit the sustainable competitive advantage and then acts on the financial controllable resources of the enterprise (Zhu, 2016). In all stages of enterprise development, innovation is an important factor in maintaining a companyrsquo;s competitiveness (<a
剩余内容已隐藏，支付完成后下载完整资料</a
Exploring the impact of government subsidy and Ramp;D investment on financial competitiveness of Chinarsquo;s new energy listed companies: An empirical study
Highlights
bull;Ramp;D investment intensity has a significant positive correlation with the financial competitiveness, and it has a lag effect.
bull;The moderating role of the government subsidies is examined.
bull;Factor analysis is used to explore the calculation of financial competitiveness.
bull;First examining the effect of government subsidies in the new energy industry in China.
Abstract
In the environment where the traditional energy industry is declining and the new energy industry is developing rapidly, we collected the data from 98 new energy companies listed in Chinarsquo;s Shanghai and Shenzhen stock markets from 2012 to 2016 to conduct an empirical study to understand the relationship between their Ramp;D investment intensity and their corporate financial competitiveness. In addition, we looked at an issue of how the relationship is impacted by government subsidies. The research results show that the Ramp;D investment intensity has a significant positive correlation with the financial competitiveness of Chinarsquo;s new energy listed companies, and it has a lag effect. The current government subsidies have no significant moderating effect on the relationship between Ramp;D investment and
financial competitiveness. Based on the empirical study conducted, we propose that Chinarsquo;s new energy listed companies should increase Ramp;D investment, strengthen the
long-term budget management of Ramp;D investment, and increase government support and supervision in order to enhance financial competitiveness.
Keywords: Chinarsquo;s new energy listed company; Government subsidies
Ramp;D investment; Financial competitiveness
- Introduction
Innovation is the first driving force for development and the strategic support for building a modern economic system (Xi, 2017). Since the 18th National Congress, China has vigorously implemented an innovation-driven development strategy. The 19th National Congress continued to propose strengthening the construction of the national innovation system and strengthening strategic and technological forces (Xi, 2017). Scientific and technological innovation plays a vital role in building a well-off society in China.
According to the “Statistical Bulletin on Chinarsquo;s Science and Technology Funds”, in 2016, China invested a total of 1567.67 billion yuan in research and development (Ramp;D) investment, which was an increase of 10.6% over 2015, and the growth rate was 1.7 percentage points higher than that in 2015. Among them, corporate expenditures accounted for 77.5% which is the main body of enterprises in research and experimentation. The 19th National Congress of the Communist Party of China proposed to establish a technological innovation system with enterprises as the mainstay, market-oriented, and deep integration of production, education and research (Xi, 2017). Due to the increasingly fierce domestic and international market competition, technological innovation capability directly affects the competitiveness of enterprises. In recent years, the Chinese government has continuously strengthened its support for small and medium enterprisesrsquo; innovation and promoted transforming scientific and technological achievements into production. Therefore, there has been a widespread concern about whether Ramp;D investment representing the technological
innovation capability of enterprises improves the financial competitiveness of enterprises, and how government subsidies affect them.
The energy industry as a supporting industry has made an indelible contribution to Chinarsquo;s economic development. According to the BP World Energy Statistics Yearbook, Chinarsquo;s energy consumption accounted for 23% of global consumption in 2016 and is the worldrsquo;s largest energy consumer. However, with the sharp decline of fossil fuels and the increasingly serious environmental pollution, the development speed of the traditional energy industry has gradually slowed down, and the new energy industry with abundant resources and cleanliness has developed rapidly. In 2016, the worldrsquo;s renewable energy grew by 12% and continued to grow at the fastest rate. The new energy field has gradually become a key industry in the world for competing development.
This paper takes the listed companies in the new energy industry as the research object, empirically analyzes the impact of Ramp;D investment on the companyrsquo;s financial competitiveness, and studies the role of government subsidies for this impact. Finally it offers specific countermeasures and suggestions for the new energy industry.
- Related literature review and research hypothesis
2.1. Correlation between Ramp;D investment and current financial competitiveness
Enterprise financial competitiveness refers to a kind of competitiveness that is based on knowledge and innovation ability, and effectively integrates the ability of the financial capability system of the enterprise to benefit the sustainable competitive advantage and then acts on the financial controllable resources of the enterprise (Zhu, 2016). In all stages of enterprise development, innovation is an important factor in maintaining a companyrsquo;s competitiveness (<a
剩余内容已隐藏，支付完成后下载完整资料</a
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