现金持有对R&D投资的平滑作用:产品市场竞争的视角

The smoothing role of cash holdings in R&D investments:A perspective on product market competition

现金持有可以有效平滑企业的R&D投资,行业层面的产品市场竞争则会进一步影响现金持有平滑作用的大小。本文以2007~2016年间沪深两市1911家非金融类A股上市公司为样本,运用GMM动态面板估计方法,从现金流波动和外部治理两个角度,实证考察了产品市场竞争对现金持有平滑作用的影响及可能的机制。结果表明:产品市场竞争的加剧将显著增强现金持有对R&D投资的平滑作用,且对于现金流波动大、市场势力弱、多元化程度低,以及公司治理水平差的企业,这种增强效果更为明显。研究结论不仅为现金持有对R&D投资的平滑作用提供了一种新解释,还有助于从R&D投资的角度理解产品市场竞争提升现金持有价值的作用。

As R&D investments have long investment cycle and high adjustment costs,if they are interrupted and restarted,it will cost a lot.Therefore,how to ensure continuous and stable R&D investments is quite critical.Cash holdings are the best current assets which have lower adjustment costs,able to smooth R&D investments.Meanwhile,at the industry level,competition in the product can influence the smoothing effect through strengthening cash flow fluctuation and realizing external governance function.Using 1,911 non-financial A-share firms listed on Shanghai and Shenzhen Exchanges from 2007 to 2016 as the sample,this paper empirically examines the impact of the product market competition on the smoothing effect of cash holdings by using the GMM dynamic panel estimation method from the two perspectives of cash flow fluctuation and external governance.The results not only provide an insightful explanation for the smoothing effect of cash holdings on R&D investments from the perspective of product market competition in industry level,but also help us understand the role of product market competition in increasing the value of cash holdings from the perspective of R&D investments.Firstly,this paper examines the impact of product market competition on the smoothing effect of cash holdings based on the existence of the smoothing effect of cash holdings by using the Herfindahl index of sales among firms in same industry to measure the competition in the product market and adding the interaction terms between it and the increase in cash holdings into the regression model.The empirical results show that after controlling for financing and investment opportunities and other related factors,cash holdings have a significant smoothing effect on R&D investments,and the product market competition will further enhance the smoothing effect of cash holdings.The empirical results are robust to alternative measures of key variables,using Difference-inDifference regression based on two exogenous shocks arising from the enactment of two policies related to market competition,anti-price monopoly and promoting fair market competition,to overcome endogenous problem,controlling the impacts of the overall volatile of stock market during the 2008 global financial crisis and the 2015 Chinese stock market crash,as well as examinations for different subsamples.Secondly,to test the underlying mechanism that product market competition imposes an impact on the smoothing effect by strengthening cash flow fluctuation,we split the sample into different subsamples based on cash flow fluctuations,market powers,and diversification degrees,respectively.The comparative results indicate that the strengthening role of competition is more pronounced for firms with more volatile cash flows,weaker market power and lower diversification,which supports our hypothesis well.Finally,another underlying mechanism is investigated by testing the heterogeneous effects of market competition on smoothing effect across firms with different levels of internal governance.The comparable results of different subsamples also demonstrate that product market competition will obviously strengthen the smoothing effect much more for firms with higher state ownership and lower shareholdings of managers as well as lower shareholdings of institutional investors,which supports the hypothesis that the role of external governance played by market competition can intensify the smoothing effect of cash holding on R&D investments.Our conclusion suggests that,the fiercer the market competition is,the more companies need to use the smoothing effect of cash holdings to maintain stable and continuous R&D investments.In the future,as China will accelerate the building of an innovative country and realize the needs of the socialist modernization era,it provides innovative enterprises with excellent development opportunities.However,In the process of economy globalization,technology replacement acceleration and economy system reform,the overall competition in the market will become fiercer and fiercer.Therefore,this paper has important and practical implications for both firms and government.From the micro aspect,innovative firms should be fully aware of the importance of asset liquidity management and cash reserves.Specially,firms shall improve their risk-resistance capacity with scientific cash holding strategies.From the macro aspect,the government shall not only accelerate the perfection of socialist market economy system,but also prevent the imbalance between fund supply and innovative demand arising from market competition.The designing of policies shall not only be able to guide firms to actively manage the liquidity of assets,but also be able to continuously enrich financing mechanisms and financial services that can support innovation,so as to prevent any possible contradiction between competition and innovation.