Market Competition, R&D Investment and Innovation Output: Conditional Process Analysis Based on the Moderating Effect of Venture Capital

Abstract

Small and medium-sized enterprises are the main carriers to promote national economic growth and employment, and these enterprises’ innovation ability is closely related to the country’s innovation strategy. As “High-energy Capital”, venture capital is an important means to promote innovation output performance and increase R&D input of these enterprises. This research adopts the “Conditional process model” proposed by Hayes to replace the traditional mediating model, and according to the regulation of venture capital, the study analyzes this conditional process of small and medium-sized scientific and technological enterprises and explores the nexus between market competition and the innovation output. Empirical research shows that the degree of market competition restrains the creative production of enterprises through the balancing effect of R&D spending, and the venture capital can adjust every path in the conditional process model to advance innovation output of enterprises. The conclusions provide enlightenments for the decision-making of these enterprises, and facilitate local governments to formulate reasonable innovation policies according to market competition.