Internal Control, Financing Constraints and R&D Intensity

This paper investigates the value relevance of internal control, financing constraints and corporate research and development (R&D) intensity. By building financing constraint index, multiple regression models and structural equation model, based on fmancial data of A-share listed companies from 2007 to 2014, the following conclusions are reached. First, both internal control and financing constraint are relevant with corporate R&D intensity. Second, fmancial slack has meditation effect on internal control and R&D intensity, showed as the enhancement of internal control implementation relief on financial slack intense R&D output. Based on the analysis of the empirical results, this paper also provides suggestions on how to further improve the R&D intensity and corporate innovation.