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The Frontiers of Society, Science and Technology, 2019, 1(5); doi: 10.25236/FSST.19010526.

Does financing constraints affect firms' R&D? —Evidence from Chinese listed firms


ZiHan Yuan, HaoYu Hou

Corresponding Author:
ZiHan Yuan

Shanghai University, Shanghai 201800, China


R&D investments of enterprises require long-term and sustained support of large amounts of capital. So the access to external financing resources is a key factor affecting R&D investments. This paper discusses the theoretical mechanism of the impact of financial constraints on R&D expenses. Then the panel data of 2095 A-share listed companies in China from 2012 to 2017 is used as a sample for empirical test of the impact of financial constraints on R&D based on the fixed-effect model. The results show that financing constraints have an inhibitory effect on R&D investments of enterprises. Additionally, for non-state-owned enterprises, the impact of financing constraints on R&D expenses is very significant while the impact of financial constraints is not obvious for state-owned enterprises.


Financial constraints; Firm R&D; Innovation

Cite This Paper

ZiHan Yuan, HaoYu Hou. Does financing constraints affect firms' R&D? —Evidence from Chinese listed firms. The Frontiers of Society, Science and Technology (2019) Vol. 1 Issue 5: 144-151. https://doi.org/10.25236/FSST.19010526.


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