RETRACTED ARTICLE: Algorithm research on the influence of financing structure and cash holding on enterprise innovation based on system GMM model function theory

Cheng-Ben Wang, Jie-Ru Rong and Jia-Ming Zhu ()
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Cheng-Ben Wang: Anhui University of Finance and Economics
Jie-Ru Rong: Anhui University of Finance and Economics
Jia-Ming Zhu: Anhui University of Finance and Economics

Journal of Combinatorial Optimization, 2023, vol. 45, issue 2, No 7, 28 pages

Abstract: Abstract Aiming at the impact of financing structure and cash holdings on enterprise innovation, this article uses the system GMM model. The empirical findings show that the higher the proportion of equity financing, the more cash companies hold, and the more R&D expenses companies put on. Mediation effect model and GMM method are used here. The total effect of financing structure on enterprise innovation c = 0.028, the direct effect of financing structure on enterprise innovation c’ = 0.025, and the indirect effect of financing structure on enterprise innovation a × b = 0.121 × 0.020, these effects are statistically significant. Cash holdings is an intermediary channel between financing structure and enterprise innovation. In addition, using quantile grouping and interaction items of financial marketization degree, this paper finds that, when financial marketization degree is low, the effect of equity financing in external financing through cash holding channels to promote the growth of R&D expenses is more significant than when financial marketization degree is high. With the help of the placebo test, it is of great significance to develop the stock market and raise the degree of financial marketization for promoting enterprise innovation.

Keywords: Enterprise Innovation; The System GMM model; Ordinary least squares (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s10878-023-00991-1

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