Can the gap and rating of market expectation promote innovation input of China manufacturers?

Abstract

Under the strategic background of Made-in-China to Mind-in-China, how the capital market expectation affects enterprise innovation input has reached no coincident conclusion. This paper uses Chinese A-share manufacturing listed companies from 2010 to 2017 to investigate the internal mechanism among the gap and rating of market expectation and enterprise innovation input, and further explores the moderating effects of institutional coverage and government subsidies. The results show that: firstly, innovation input will first decrease and then increase with the market expectation gap increase. However, innovation input will first increase and then decrease with the market expectation rating increase. Secondly, when the institutional coverage and government subsidies increase, innovation input will remarkably transform from the first decrease and then increase into the first increase, then decrease with the market expectation gap increase. Finally, when institutional coverage is high and government subsidies are low, innovation input will remarkably transform from the first increase and then decrease into the first decrease, and then increase with the market expectation rating increases. These research findings can provide some academic support and policy references for managers to deal with effectively external performance pressures, institutional coverage, and optimize government subsidies to promote manufacturers' innovation-driven upgrading.