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Firms’ Technology Innovation Activity: Does Financial Structure Matter?
Author(s) -
Khan Muhammad Kaleem,
He Ying,
Akram Umair,
Zulfiqar Salman,
Usman Muhammad
Publication year - 2018
Publication title -
asia‐pacific journal of financial studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.375
H-Index - 15
eISSN - 2041-6156
pISSN - 2041-9945
DOI - 10.1111/ajfs.12213
Subject(s) - business , china , financial innovation , financial structure , variety (cybernetics) , financial system , finance , panel data , financial market , industrial organization , economics , artificial intelligence , political science , computer science , law , econometrics
Abstract In this paper we estimate the extent to which financial structure influences technology innovation activity ( TIA ) in China. Based on a variety of specifications and by employing panel data estimation techniques, we find that a capital‐market‐based financial structure supports TIA more efficiently than a bank‐bases financial structure does. Chinese firms in high‐tech industry are getting privilege from overwhelming financial development in China to enhance their TIA. Private firms in particular are becoming more and more active in TIA by taking advantage of China's developing capital market, whereas state‐owned enterprises are advancing in technological innovation owing to continuous financial support from the state‐owned credit market.