Review of Theoretical Mechanisms and Empirical Results in Firm's Innovation Financing

For the importance of innovation to economy development, innovative financing has always been the focus of academic topics around the world. From corporate finance perspective, this article reviews literature related to the impacts on business innovation of various financing ways, summarizes the findings that all financing ways in supporting innovation have their own advantages and disadvantages, innovation firms need to choose appropriate financing ways according to their development stage and innovation types. The quality and professionalism of financial investment institutions are very important to the relationship between innovation and financing. Finally, in view of China's environment, the paper puts forward to policy suggestions on how to construct the financial system and improve the banking environment for financing in a systemic way, how to promote the development of professional banks, how to accurately position stock markets and construct security bodies, and how to lead a high-quality and large scale growth of private equity funds.