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The Effect of R&D Input and Financial Agglomeration on the Growth Private Enterprises: Evidence from Chinese Manufacturing Industry

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  • Haixin Zhang
  • Donghong Ding
  • Lili Ke

Abstract

Technological innovation is an important factor in the growth of private enterprises, and technological innovation requires strong financial support. How to use financial tools to promote research and development (R&D) input at private enterprises has become an urgent issue. This article analyzes the influence of provincial and prefectural financial agglomeration and R&D input on the growth of private enterprises, using panel data on Chinese private enterprises in manufacturing from 2007 to 2015. We reached the following conclusions. First, the promotion of financial agglomeration and R&D input have a positive impact on the growth of private enterprises. Second, the impact of financial agglomeration on private enterprises is inversely related to the scale of private enterprises—that is, the larger the scale of enterprises, the smaller the impact of financial agglomeration on the growth of private enterprises. Third, financial agglomeration did not promote growth at private enterprises by increasing R&D input. Financial agglomeration can increase the absolute amount of R&D input; however, it will reduce the intensity of R&D input. Financial agglomeration, R&D input, and the growth of enterprises do not create their own virtuous circle, and they fail to provide financial support for technological innovation.

Suggested Citation

  • Haixin Zhang & Donghong Ding & Lili Ke, 2019. "The Effect of R&D Input and Financial Agglomeration on the Growth Private Enterprises: Evidence from Chinese Manufacturing Industry," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 55(10), pages 2298-2313, August.
    • Handle: RePEc:mes:emfitr:v:55:y:2019:i:10:p:2298-2313
    DOI: 10.1080/1540496X.2018.1526668
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    Cited by:

    1. Jiang, Nana & Jiang, Wei & Wang, Yanfei & Zhang, Jinning, 2024. "Impact of financial reform on urban resilience: Evidence from the financial reform pilot zones in China," Socio-Economic Planning Sciences, Elsevier, vol. 94(C).
    2. Guo-Hua Cao & Jing Zhang, 2021. "Is a sustainable loop of economy and entrepreneurial ecosystem possible? a structural perspective," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(5), pages 7002-7040, May.
    3. Roland Standert, 2020. "R&D Spending and Stock Returns: Evidence from Germany," Journal of Accounting, Business and Finance Research, Scientific Publishing Institute, vol. 10(2), pages 68-75.
    4. Yang, Xingquan & Zhao, Rui & Yang, Zheng, 2024. "Preventive regulation and corporate financialization: Evidence from China Securities Regulatory Commission's random inspections," International Review of Financial Analysis, Elsevier, vol. 91(C).
    5. Amit Kumar & Arti Sharma & Chandan Maheshkar & Chandra Sekhar Patro & Deepti Sinha & Ernesto Guerra García & Gaurav Gupta & James Phelan & Jeremy Kwok & Joana Vassilopoulou & José G. Vargas-Hernández , 2023. "Handbook of Research on Cross-culture Business and Management," Vernon Press Titles in Economics, Vernon Art and Science Inc, edition 1, number 1679.
    6. Yoon‐Hee Ha & John Byrne & Hae‐Seok Lee & Ye‐Jin Lee & Dong‐Hwan Kim, 2020. "Assessing the impact of R&D policy on PV market development: The case of South Korea," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 9(2), March.
    7. Huan Chen & Tingyong Zhong & Jeoung Yul Lee, 2020. "Capacity Reduction Pressure, Financing Constraints, and Enterprise Sustainable Innovation Investment: Evidence from Chinese Manufacturing Companies," Sustainability, MDPI, vol. 12(24), pages 1-16, December.

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