The Complexity of Technological Innovation Decision-Making in Emerging Industries

It is well known that innovation-driven emerging industries have gradually become the main driving force of global economic recovery and growth. Technological innovation decision-making is a complex and dynamic system, which is affected by various factors inside and outside an enterprise. In this dynamic system, how to make the optimal technological innovation investment decisions is a key concern for enterprises and governments. As an investment activity, technological innovation largely depends on the amount of external financing obtained by enterprises. However, financial constraints have increasingly become an obstacle to enterprises’ technological innovation. At the same time, technological innovation is also affected by the external political and economic environment, such as changes in economic policy, government subsidy policies, and institutional environmental policies. Can these external environments reduce the negative impact of financing constraints on technological innovation? In this study, based on the data of listed companies in China’s strategic emerging industries, we adopt a panel negative binomial regression model to investigate the complexity of technological innovation decision-making from the perspective of financing constraints. Our main findings include the following. First, financing constraints significantly inhibit the input and output of technological innovation in emerging industries. Second, the inhibition effect on the output of substantive innovations is more pronounced than that on the output of strategic innovations. Third, based on the analysis of enterprise heterogeneity in different dimensions, we show that this inhibition has a selective effect among different industries. Finally, we show that economic policy and marketization can help alleviate the inhibition effect of financing constraints on technological innovation.