External Guarantee and Enterprise Innovation Investment
CHEN Zeyi, LI Changqing, LI Yukun
School of Accounting,Guangdong University of Finance; School of Management, Xiamen University; School of International Business, Shanxi Normal University
Summary:
External guarantees are widespread in the Chinese capital market. At the end of 2019, the external guarantees of all A-share listed companies were worth RMB446.8 billion. The 683 companies with external guarantees make up nearly 20% of all Chinese listed companies, and approximately half of these companies (338) have external guarantees that exceed 50% of their net assets. Through risk contagion, the continually increasing size of external guarantees has added to the risk level in the market. Some enterprises have already experienced severe problems due to excessive external guarantees. For example, Shengyun Environmental Protection Group was ultimately delisted and went bankrupt due to significant unpaid guarantee debts. External guarantees can also lead to “thunderclap” events in which one company after the other gets into difficulty, and this has attracted the attention of regulators and investors. Innovation is the primary driving force for the high-quality development of the Chinese economy. Innovation is also important for individual enterprises, as it helps them break through the bottleneck of development and enhance their core competitiveness. However, innovation requires long-term and continual investment, which in turn requires an enterprise to have a healthy financing ability and an active willingness to innovate. External guarantees not only increase the financing constraints on enterprises but also intensify agency conflicts, which may affect enterprises' willingness to invest and their level of investment in R&D. However, few studies have explored the impact of external guarantees on enterprises' R&D investment. Using a sample of Chinese A-share listed companies from 2008 to 2019, this study examines the impact of external guarantees on enterprise innovation investment, and the underlying mechanism of this impact, from the perspectives of innovation resources and innovation willingness. The results show that external guarantees significantly reduce innovation investment by enterprises, and the impact is more significant in non-state-owned enterprises and technology-intensive industries than in state-owned enterprises and non-technology-intensive industries. The empirical conclusions remain robust to the Heckman two-stage test, propensity score matching, alternative selection of instrumental variables and differences-in-differences analysis to control for endogeneity problems. Further analysis shows that external guarantees force enterprises to reduce innovation investment due to increased debt-financing costs and tighter financing constraints. External guarantees also weaken the willingness of major shareholders and executives to invest in innovation, which ultimately reduces enterprise innovation investment by increasing the agency cost of major shareholders and reducing equity incentives. This study makes the following contributions to the literature. First, it expands the literature on the economic consequences of external guarantees. The few studies on the impact of external guarantees focus largely on corporate risk, debt financing costs, audit fees and stock price crash risk. In contrast, we examine the impact of external guarantees from the novel perspective of innovation investment. Second, this study enriches the theoretical understanding of external guarantees. Unlike previous research, we discuss the impact of external guarantees on innovation investment within the framework of risk transfer theory and agency theory. Based on the risk-shifting hypothesis, we investigate how external guarantees weaken the ability of enterprises to obtain innovation resources. Additionally, we explore how external guarantees reduce the innovation willingness of major shareholders and executives, in keeping with agency theory. This provides a more comprehensive and in-depth understanding than previous studies of how external guarantees affect R&D investment. Third, this study enriches research on the factors influencing innovation investment, as we are among the first to examine the impact of external guarantees on enterprise innovation. This complements previous research on how factors such as financial market development, legal protection, corporate governance, executive characteristics and executive incentives influence innovation investment.
[1]曹廷求和刘海明,2016,《信用担保网络的负面效应:传导机制与制度诱因》,《金融研究》第1期,第145～159页。 [2]陈汉文和周中胜,2014,《内部控制质量与企业债务融资成本》,《南开管理评论》第3期,第103～111页。 [3]冯根福和温军,2008,《中国上市公司治理与企业技术创新关系的实证分析》,《中国工业经济》第7期,第91～101页。 [4]江轩宇,2016,《政府放权与国有企业创新——基于地方国企金字塔结构视角的研究》,《管理世界》第9期,第120～135页。 [5]鞠晓生、卢荻和虞义华,2013,《融资约束、营运资本管理与企业创新可持续性》,《经济研究》第1期,第4～16页。 [6]李春涛和宋敏,2010,《中国制造业企业的创新活动:所有制和CEO激励的作用》,《经济研究》第5期,第55～67页。 [7]李金凯,2018,《担保网络如何影响企业绩效——基于融资约束和利益输送双重视角的研究》,《山西财经大学学报》第2期,第112～124页。 [8]冷奥琳、张俊瑞和邢光远,2015,《公司对外担保违约风险传递机理和影响效应研究——基于上市公司债券利差数据的实证分析》,《管理评论》第7期,第3～14页。 [9]刘彬、张俊瑞和白雪莲,2017,《对外担保与债务成本关系研究——基于审计意见调节效应的视角》,《预测》第2期,第9～16页。 [10]刘海明和李明明,2021,《上市公司子公司对外担保的理论逻辑与实证检验》,《财经论丛》第2期,第68～77页。 [11]刘善敏和林斌,2011,《基于大股东掏空下的经理人薪酬激励机制研究》,《财经研究》第8期,第69～78页。 [12]罗进辉、刘海潮和巫奕龙,2022,《高管团队稳定性与公司创新投入:有恒产者有恒心？》,《南开管理评论》网络首发。 [13]鲁桐和党印,2014,《公司治理与技术创新:分行业比较》,《经济研究》第6期,第115～128页。 [14]沈红波、廖冠民和曹军,2011,《金融发展、产权性质与上市公司担保融资》,《中国工业经济》第6期,第120～129页。 [15]田轩和孟清扬,2018,《股权激励计划能促进企业创新吗》,《南开管理评论》第3期,第176～190页。 [16]王姝勋、方红艳和荣昭,2017,《期权激励会促进公司创新吗？——基于中国上市公司专利产出的证据》,《金融研究》第3期,第176～191页。 [17]王彦超和陈思琪,2017,《关联担保的债务风险转移》,《中国工业经济》第8期,第120～137页。 [18]伊志宏、王皓和陈钦源,2021,《企业对外担保与股价崩盘风险——基于A股上市公司的经验证据》,《会计研究》第4期,第157～177页。 [19]余明桂、钟慧洁和范蕊,2019,《民营化、融资约束与企业创新——来自中国工业企业的证据》,《金融研究》第4期,第75～91页。 [20]Ang, J. S., Y. Cheng, and C. Wu. 2014. “Does Enforcement of Intellectual Property Rights Matter in China？ Evidence from Financing and Investment Choices in the High-tech Industry”, Review of Economics and Statistics, 96(2):332～348. [21]Berger, A. N., W. S. Frame, and V. Ioannidou. 2011. “Tests of ex ante versus ex post Theories of Collateral Using Private and Public Information”, Journal of Financial Economics, 100(1):85～97. [22]Berkman, H., R. A. Cole, and L. J. Fu. 2009. “Expropriation through Loan Guarantees to Related Parties: Evidence from China”, Journal of Banking & Finance, 33(1):141～156. [23]Brown, J. R., G. Martinsson, and B. C. Petersen. 2012. “Do Financing Constraints Matter for R&D？ ”,European Economic Review,56(8):1512～1529. [24]Calcagnini, G.,F. Farabullini, and G. Giombini. 2014. “The Impact of Guarantees on Bank Loan Interest Rates”,Applied Financial Economics,24(6):397～412. [25]Carpenter, R. E., and B. C. Petersen. 2002. “Is the Growth of Small Firms Constrained by Internal Finance”,The Review of Economics and Statistics,84(2):298～309. [26]Cook, D. O., and L. J. Spellman. 1996. “Firm and Guarantor Risk, Risk Contagion, and the Interfirm Spread among Insured Deposits”, Journal of Financial and Quantitative Analysis,31(2):265～281. [27]Frank, M. Z., and T. Shen. 2016. “Investment and the Weighted Average Cost of Capital”. Journal of Financial Economics, 119(2):300-315. [28]Hall, B. H., and J. Lerner. 2010. “The Finance of R&D and Innovation”,Handbook of the Economics of Innovation,1:609～639. [29]He, J. J., and X. Tian. 2013. “The Dark Side of Analyst Coverage: The Case of Innovation”,Journal of Financial Economics,109(3):856～878. [30]Hsu, P.,X. Tian, and Y. Xu. 2014. “Financial Development and Innovation: Cross-country Evidence”,Journal of Financial Economics,112(1):116～135. [31]Jimenez, G., V. Salas, and J. Saurina. 2006. “Determinants of Collateral”,Journal of Financial Economics,81(2):255～281. [32]Mazouz, K., and Y. Zhao. 2019. “CEO Incentives, Takeover Protection and Corporate Innovation”,British Journal of Management,30(2):494～515. [33]Oyer, P., and S. Schaefer. 2005. “Why Do Some Firms Give Stock Options to All Employees？: An Empirical Examination of Alternative Theories”,Journal of Financial Economics,76(1):99～133. [34]Stiglitz, J. E., and A. Weiss. 1981. “Credit Rationing in Markets with Imperfect Information”,American Economic Review,71(3):393～410. [35]Sun, Y.,Z. Ma, and Y. Shi. 2015.“Effects of Large Shareholders' Tunneling on Executive Incentive Contract”,International Conference on Logistics, Informatics and Service Sciences . [36]Wang, F.,L. Xu, F. Guo , and J. Zhang. 2020.“Loan Guarantees, Corporate Social Responsibility Disclosure and Audit Fees: Evidence from China”,Journal of Business Ethics,166(2):293～309.
