Insights From Chinese Corporations: Strategic Financial Management and Its Impact on Corporate Innovation

Abstract

This study explores the complex connections between financial structure, financial flexibility reserves, and corporate innovation in the Chinese corporate context. Utilising a mixed-methods approach that combines theoretical analysis with empirical testing through regression analysis of survey data, the research reveals noteworthy insights. The findings indicate that the percentage of emerging finance has a positive impact on corporate innovation. Additionally, a well-balanced financing structure improves financial flexibility, which is essential for maintaining innovation efforts. In addition, the competitive nature of the banking industry plays a crucial role in promoting financial adaptability and, as a result, fostering corporate innovation. The study also emphasizes the importance of financial flexibility in the relationship between financial structure and innovation, indicating that firms' strategic management of their financial resources greatly influences their innovation capabilities. This research adds to the current understanding of finance and innovation, providing important implications for business leaders and policymakers.