Capital structure and innovation for social progress: How high-tech firms shape economic development and institutional resilience in China

Abstract

This study investigates how capital structure and R&D investment strategies in high-tech listed companies contribute not only to firm performance but also to broader economic development and institutional resilience in China. In the face of a competitive global landscape that is intensifying and rapidly evolving technologically, high-tech enterprises are positioned as key actors in fostering innovation-driven growth, economic upgrading, and inclusive social progress. The empirical nature of the research involves examining financial information from high-tech companies to analyze the relationship between capital structure, R&D investment, firm size, and firm performance over a period of five years. This study adopts a quantitative approach by applying multiple regression analysis to measure the relationship between the independent variables and firm performance. More importantly, investment in R&D not only enhances innovation capacity and market adaptability but also reinforces national objectives related to technological self-reliance, green transformation, and the Sustainable Development Goals (SDGs). Grounded in both literature and practice, this study links several bodies of literature that have so far remained largely separate: corporate finance, strategic management, and innovation management. The findings contribute to ongoing debates on the role of private-sector financial strategies in achieving structural transformation, innovation, equity, and institutional strengthening in emerging economies. The results highlight the significance of maintaining a balanced capital structure and strategic investment in R&D to spur sustainable growth within high-tech industries. This research offers actionable insights for policymakers seeking to harness firm-level innovation for societal advancement and sustainable economic development.