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4689Nowadays, Chinese economy is switching from "resource-dependent" economic development mode to "innovation-driven" mode since growth driven by investment has further aggravated capital dependence and has resulted in a twisted financial market. While the demand for total investment in fixed assets continues to slope down, the speed of financial expansion does not weaken, resulting in a rise in leverage ratio from 98.1 percent to 170.8 percent and serious deviation of supply and demand between finance and the real economy. Under this circumstance, to develop an innovation-driven economy has been highlighted as a national strategy. Nevertheless, there is still little literature of how technical innovation adjusts micro structure of assets and liabilities and corrects macro financial distortion. This paper tries to make up the research gap above by answering the following questions:(1) can technical innovation help corporate de-leveraging? what is its mechanism? (2) can the catalysis (spillover) effect of industry innovation level on corporate technical innovation "accelerate" corporate leverage governance? does heterogeneity exist in the acceleration? (3) as policy incentive mechanism for innovation, do tax preference and innovation subsidies "accelerate" corporate leverage governance? does heterogeneity exist in the acceleration?
On the basis of a literature review of dynamic adjustment to capital structure, this paper firstly points out that the introduction of technical innovation into micro finance analytical framework is a necessary trend resulting from the transformation from random technical innovation to routine technical innovation. Secondly, by introducing the impacts of technical innovation on market competition ability and capacity governance ability of enterprises, this paper reveals micro logic of realizing enterprise leverage governance by technological innovation and proves that technical innovation has significant de-leveraging effects on over leveraged enterprises, and some cover-leveraging effects on less leveraged enterprises. Thirdly, by measuring innovation subsidies at firm level and estimating tax preference at exponential level, this paper examines how innovation subsidies and R&D expenses plus pre-tax deductions accelerate enterprise leverage governance through catalyzing technical innovation, and proves that innovation subsidies play an acceleration role only in private enterprise deleveraging and tax preference accelerates only profit-making enterprise deleveraging. Finally, by measuring the whole levels of "exploratory innovation" and "exploitative innovation" of each high-tech industry, we prove that higher levels of industry "exploratory innovation" and "exploitative innovation" give rise to stronger knowledge spillover effect, more stimulated enterprise innovation, and more prominent deleveraging effect of technical innovation & acceleration effect of "exploratory innovation".
As for empirical approach, following Flannery and Rangan (2006), this paper introduces target leverage rate into the dynamic adjustment process and employs SYS-GMM to solve the adjustment speed and optimal leverage rate, thereby verifying differentiated governance effect of technical innovation on static leverage rate. Furthermore, we also regard innovation subsidies, tax preference and industry innovation environment as determinants of adjustment speed of leverage rate, and incorporate them into the empirical model to make a cross-term analysis, proving the differentiated effect of environmental factors on leverage governance speed.
The potential contributions of this paper are:(1) it analyses the governance effect of technical innovation on leverage rate, investigates the disturbance (acceleration) role of policy and industry as two innovation boosters in governance effect, and reveals micro finance connotation of enhancing innovation ability and improving innovation environment (innovation driven). (2) By using the technical innovation as the transmission channel, this paper constructs a new relationship study between macro-economic environment (policy & industry environment) and micro-enterprise behavior, and provides reference for the analysis and evaluation of effects and shortcomings of innovation incentive policy.
