Research on the Impact of Financial Flexibility on Innovation Investment from the Perspective of Institutional Ownership

Abstract

Uncertainty in the business environment brings many challenges and opportunities to enterprises. This paper studies the impact of financial flexibility on innovation investment from the perspective of institutional ownership, using data of A-share high-tech enterprises from 2014 to 2018 as the empirical analysis sample. The results show that financial flexibility can promote innovation investment. Moreover, compared with state-owned enterprises, cash flexibility plays a more significant role in promoting non-stateowned enterprises, while debt flexibility only promotes innovation investment in non-state-owned enterprises. Through further research, it is found that the size of institutional investors' shareholding has the positive moderating effect on the relationship between financial flexibility and innovation investment. In addition, non-independent institutional investors' shareholding plays a negative role in regulating the impact of financial flexibility on innovation investment.