The business environment has become more severe in recent years because of the impact of trade friction between China and America and the global epidemic. To achieve long-term survival and development, enterprises must carry out innovative activities and develop new products to meet market demand. We use empirical analysis to study the mechanism of leverage on innovation performance based on the data of listed companies in the Shanghai and Shenzhen exchanges in 2022. This study shows that firms' leverage has a positive impact on their innovation performance, while firms' gross profit margins play a negative mediating effect in it. So, firm leverage can decrease gross margins and thus improve innovation performance.
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Tianjian Lin (2024) studied this question.
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