Accounting integrity, borrowing capacity and corporate R&D input: Evidence from China

Hanfang Chen, Zhongjie Wang and Zhangchi Chen

Finance Research Letters, 2024, vol. 62, issue PB

Abstract: Accounting integrity regulates market order, enhances corporate financial credit, and empowers corporate innovation. This paper explores how the construction of an accounting integrity system in micro entities affects and plays a role in enterprises’ R&D input policies and uses a panel threshold regression model to study the nonlinear relationship between the two empirically. By constructing a mediation model, we examined the mediating effect of borrowing capacity on the impact of accounting integrity on corporate R&D input and performed a robustness test. Our findings include: (1) improving accounting integrity ensures the quality of accounting information in enterprises; (2) the facilitation effect of accounting integrity on corporate R&D input shows a single threshold effect, and the improvement of accounting integrity is increasingly conducive to corporate R&D input; and (3) accounting integrity increases enterprises’ chances of borrowing capacity, alleviating the financing constraints of enterprises, and promoting enterprise innovation.

Keywords: Accounting integrity; R&D input; Borrowing capacity; Corporate innovation (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:62:y:2024:i:pb:s1544612324001946

DOI: 10.1016/j.frl.2024.105164

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