TITLE:
Capital Structure and R&D: Empirical Evidence from China and USA
AUTHORS:
Yatong Yang
KEYWORDS:
Capital Structure, R&D Investment, China, USA, SOEs and Non-SOEs
JOURNAL NAME:
Modern Economy,
Vol.13 No.4,
April
22,
2022
ABSTRACT: This paper focuses on how the capital structure of
enterprises affects their R&D intensity,
introduces the asset-liability ratio to compare the capital structure of
China and the United States, and introduces the tradable shares to compare the capital structure of state-owned
enterprises and non-state-owned enterprises. The final result is that
the asset-liability ratio and R&D intensity are negatively correlated in both China and America, and this negative
relationship will be weakened in China. The existence of tradable shares
increases the R&D intensity, ceteris paribus, in SOEs, the negative
correlation between capital structure and R&D intensity is far greater than
that of private enterprises. Based on the fact that under the modern business
era, an enterprise’s innovation capability is closely related to its core
competitiveness, and at the same time, the promotion speed of innovation
ability depends on the scale of R&D investment, and the relationship
between capital structure and enterprise R&D investment can be deduced from
this paper.