Debt financing and technology investment Kuznets curve: Evidence from China
研究债务融资与企业创新的倒U型关系，发现适度债务促进创新，过度则抑制，对高科技企业融资决策有参考价值。
Abstract The nexus of debt financing and enterprise innovation is the most arguable debate in the modern literature of corporate finance. The subject of external debts and a smooth innovative environment is one of the common puzzles for high‐tech firms. We attempt to address this puzzle and explore the impact of efficient utilization of debt on the linkage between R&D intensity and technology investment. Patent count data are used to measure enterprise innovation, therefore, negative binomial and Poisson regression is applied for empirical analysis. The estimations validate that the linkage between debt financing and corporate innovation is inverted U‐shaped which approves the Kuznets curve hypothesis. Technology firms tend to decline debt undertaking after achieving a specific level, it is assumed as an optimum debt point, higher in incremental and lower in radical innovation. The mediation role of debt financing in the linkage between R&D intensity and technology investment is negative. However, efficient debt undertaking which remains under the optimum level improves the association between R&D intensity and enterprise innovation. High‐tech firms should be cautious on external financing because abundant debt undertaking worsens a smooth innovative environment.