The Empirical Research on the Relationship of Accounting Quality and Financial Constraints and the Innovation. - Evidence form the Listed Companies in Zhejiang Province

Innovation is meaningful to firm's competiveness and the sustainable development of the macroeconomic. The quality of accounting information is the indispensable instrument to mitigate the information asymmetry, and innovation plays important role in the process of the maximization of enterprise value. By using the data of listed companies of Zhejiang province, based on the theory that accounting information can mitigate the financial constraints through improving the contract and supervision which can reduce the moral risk and converse option, this paper finally finds accounting information can affect innovation positively through the channel of mitigating the financial constraints, therefore the financial constraint is the one of the mediators between accounting quality and innovation. The finding of this research provides evidence for companies to improve the accounting information to promote innovation and for government to enforce firms to offer high accounting information quality.