The Relationship between Financial Slack and Technological Innovation: Evidence from Henan Province in China

摘要

This paper studies the relationship between financial slack and technological innovation, and brings forward the nonlinear N-shaped relationship model between financial slack and technological innovation. The data get from 283 firms in Henan Province by questionnaire support this prediction. In the firms, too little financial slack will be positively related to technological innovation; moderate financial slack will be negatively related to technological innovation; too much financial slack will be positively related to technological innovation. Therefore, managers should formulate corresponding strategies of technological innovation basing on different level of financial slack.