Will Market Sentiment Influence the R&D Investment of Companies?

Abstract

Business transactions will be influenced by the market sentiment, and market sentiment can generate volatility for many transactions. This paper wants to study the impact of market sentiment on the R&D investment of Chinese GEM listed companies. Taking the IPO companies listed on GEM from 2013 to 2018 as the research object. The regression research results show that: the number of IPO issuance, annual transaction amount, and IPO return rate are positively correlated with the listed company ’s R&D investment in the next year and R&D investment in the next two years, and after joining the control variable of ROA in the year of IPO, the result remains unchanged. It shows that whether short-term or long-term, market sentiment has a positive impact on the company's R&D investment, this conclusion can be used as a reference when the company makes relevant decisions.