How Patient Capital Empowers Key Core Technology Innovation in Enterprises——Evidence from Chinese Listed Companies

Abstract

Key core technologies are very important for us to achieve high-level scientific and technological self-reliance. However, their R&D process is usually long and risky, and because the capital market likes to pursue short-term interests, it often encounters the problems of insufficient funds and lack of motivation. Based on the samples of China A-share listed companies from 2012 to 2023, this paper systematically studies how a kind of capital called patient capital, which pays attention to long-term value investment and can withstand high risks, affects the innovation of key core technologies of enterprises. The results show that increasing the proportion of patient capital can significantly promote the innovation output of key core technologies. Mechanism analysis shows that patient capital promotes innovation in two ways: first, it can restrain the short-sighted behavior of management, thus reducing the institutional obstacles in R&D decision-making; Second, it can increase R&D intensity and innovation efficiency, and provide stable financial support for technological breakthroughs. Further analysis shows that the empowerment of patient capital is more obvious in high-tech industries. This study provides an empirical basis for cultivating patient capital, and also provides valuable reference for optimizing technology and finance system and breaking through the bottleneck of core technology.