The impact of financing efficiency in defense industry base on non‐technological innovation: Evidence from China

Author:

Zhu Huaijia1ORCID,Chen Bo1,Chang Shiwei1,Zhu Huaiqi2

Affiliation:

1. Institute of Defense Economics and Management Central University of Finance and Economics Beijing China

2. Department of Industrial Economy University of Chinese Academy of Social Sciences Beijing China

Abstract

AbstractThe innovation of defense industry base requires not only technological progress but also scientific organization and management and reasonable business model. Based on the data of A‐share listed companies related to defense industry base in China from 2013 to 2021, this paper employs panel‐probit model with instrumental variable to empirically test the relationship and influence mechanism of financing efficiency on non‐technological innovation. It is found that the financing efficiency of the defense industry base has a significantly positive effect on organizational innovation and market innovation, which is more prominent in state‐owned enterprises and military enterprises. The influence mechanism is mainly to improve information symmetry and reduce agency costs. Internally, the defense industry base should strengthen the management of financing and innovation activities; from the external point of view, the government needs to improve the construction of capital market, and financial institutions need to play the role of professional institutional investors and external supervisors, which is conducive to improving the non‐technical innovation ability of defense industry base.

Publisher

Wiley

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