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How Does R&D Investment Affect the Financial Performance of Cultural and Creative Enterprises? The Moderating Effect of Actual Controller

Zhipeng Zang (), Qiwei Zhu () and Helena Mogorrón-Guerrero ()
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Zhipeng Zang: School of Communication, East China University of Political Science and Law, Shanghai 201620, China
Qiwei Zhu: School of Management, Shanghai University, Shanghai 200444, China
Helena Mogorrón-Guerrero: Faculty of Economics, University of Valencia, 46022 Valencia, Spain

Sustainability, 2019, vol. 11, issue 2, 1-19

Abstract: R&D investment has a sophisticated correlation with the financial performance of cultural and creative enterprises. In this study, using the panel data of listed cultural and creative enterprises in China from 2011 to 2013, we found that R&D investment has positive impacts on financial performance in both the current and the lag periods. However, these positive impacts are moderated by actual controllers. More specifically, there is a positive moderating effect on enterprises’ financial performance when the central government is the actual controller. On the other hand, there is no evident effect when the actual controller is a local government or a state-owned enterprise, and there is a clear negative moderating effect on financial performance when a natural person is the actual controller. Given these findings, we argue that local governments and state-owned enterprises should improve their long-term strategies for the cultural and creative enterprises they control and reduce actions forced by short-term economic goals. Additionally, local governments and state-owned enterprises should fundamentally stress the role of R&D in order to handle the pressure of increasingly keen competition from international companies’ technological innovation programs.

Keywords: cultural and creative enterprises; R&D investment; actual controller; financial performance (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2019
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