Leverage Ratio, Property Rights and Electronic Enterprise Innovation

Empirical Research Based on Hansen’s Threshold Regression Model

DOI

10.2991/978-94-6463-010-7_78How to use a DOI?

Keywords

Innovation; R&D Investment; Leverage Ratio; Property Rights; TR Model; Electronic Industry

Abstract

Considering the current background of China’s efforts to strengthen deleveraging and the strategy of innovation-driven development, this paper focuses on electronic enterprises, and studies the relation between leverage ratio and innovation, considering the influence of property rights heterogeneity. Based on the samples of electronic enterprises from China Industry Business Performance Database during 2005 to 2007, this paper uses Hansen’s Threshold Regression Model to give the accurate relationship between R&D Investment and total leverage ratio/short-term leverage ratio/long-term leverage ratio. The research has found that the total leverage ratio has a positive impact on R&D investment when it is lower than 83.04%, and the optimal total leverage ratio is about 54.45%–55.47%, the optimal short-term leverage ratio is about 54.47%–55.45%. Besides, the long-term leverage ratio has a negative impact on R&D investment when it is over 22.27%. According to the property rights heterogeneity analysis, as for state-owned enterprises, R&D investment is restrained when total leverage ratio is lower than 49.67%, and boosted when long-term leverage is not higher than 25.10%. As for non-state-owned enterprises, on the contrary, R&D investment is boosted when total leverage ratio is lower than 83.04%, and restrained when long-term leverage ratio is lower than 26.75%. This paper has not only enriched the studies on influence of leverage on innovation considering the property rights heterogeneity, but also brought reference for China to defuse debt risks of enterprises and enhance the spur China’s electronic enterprises to promote innovation.

Copyright

© 2023 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Cheng-run Jiang
PY  - 2022
DA  - 2022/12/02
TI  - Leverage Ratio, Property Rights and Electronic Enterprise Innovation
BT  - Proceedings of the 2022 International Conference on Artificial Intelligence, Internet and Digital Economy (ICAID 2022)
PB  - Atlantis Press
SP  - 769
EP  - 790
SN  - 2589-4919
UR  - https://doi.org/10.2991/978-94-6463-010-7_78
DO  - 10.2991/978-94-6463-010-7_78
ID  - Jiang2022
ER  -