Manuscript received January 15, 2025; accepted April 2, 2025; published July 29, 2025.
Abstract—This research examines the relationship between R&D expenditures and corporate capital structure in Chinese non-financing industries, which focus on three key indicators: total debt ratio, short-term debt ratio, and long-term debt ratio. By using a sample of 2832 companies, the research applies regression analysis to explore how R&D intensity influences capital structure decisions. The findings reveal a significant negative correlation between R&D expenditures and both total and short-term debt ratios, while no significant relationship is observed for long-term debt ratios, which suggest that R&D-intensive firms prefer equity financing over debt due to the uncertainty of R&D investments and limited collateral value of intangible assets. Additionally, the study identifies the impact of control variables: tangibility, total assets, and profitability on debt ratios. The findings align with theoretical frameworks like the trade-off theory and agency cost theory, providing evidence that companies with higher R&D intensity adopt conservative capital structures to minimize financial risks and maintain flexibility. As a result, this research indicates how companies that spend a lot on R&D tend to choose specific financing strategies, highlighting the importance of creating financial policies that better support innovation. Future research could extend this study by examining specific industries and international comparisons of R&D financing strategies.
Keywords—capital structure, R&D expenditure, debt ratio, corporate finance, Chinese non-financing industries
Cite: Xilin Zhao, "The Impact of R&D Expenditures on Capital Structure: Evidence from Chinese Non-financial Industries," Journal of Economics, Business and Management, vol. 13, no. 2, pp. 282-287, 2025.
Copyright © 2025 by the authors. This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).