Impact of overseas M&amp;As on Chinese service enterprises’ market value

Lu, Hao; Jiang, Hong; Chen, Qiong; Deng, Ping

doi:10.1080/02642069.2019.1608189

Cited by 1 publication

(1 citation statement)

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“…As the market in emerging economies continues to expand, the monopolistic power of mature firms fails, giving young firms room for development and resulting in changes to their R&D investment strategies [27]. In view of the impact of market expansion on firm R&D investment, young firms have no advantage of scale or brand and need to invest in R&D to develop a unique competitive advantage, while mature firms use the advantages of scale to focus on short-term profitmaking investment strategies [28]. is is because when the market expands and the demand for products is strong, mature firms can promote efficiency by making simple investments to expand production.…”

Section: Introductionmentioning

confidence: 99%

The Influence Mechanism of Different Cash Flow Availability on R&D Investment: Evidence from China

Hua

2022

Complexity

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It has been widely assumed and proven that a firm’s research and development (R&D) investment is limited if the availability of cash flow is constrained. The purpose of this study is to verify the opposite proposition: whether firms invest heavily in R&D when more cash flow is available. This paper discusses the heterogeneous relationship between cash flow from different sources and the R&D investment of firms. The study divides the firm’s cash flow into three categories according to the business activities that generate firm finance: cash flow from operating activities (CFO), cash flow from investing activities (CFI), and cash flow from financing activities (CFF). On this basis, a dynamic R&D investment model is constructed, and the relevant data for Chinese listed firms are used for the empirical research. The study finds that Chinese listed firms do not necessarily spend more cash on R&D investment, even if the availability of cash flow is not constrained. For young firms, CFO and CFI do not significantly correlate with R&D investment, and CFF significantly negatively correlates with R&D investment. For mature firms, the correlations between cash flow generated from different activities and R&D investment are nonsignificant.

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Section: Introductionmentioning

confidence: 99%