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Managing R&D in Chinese listed firms: The interactive effects of ownership concentration and corporate governance
Author(s) -
Wang Junmin
Publication year - 2021
Publication title -
thunderbird international business review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.553
H-Index - 37
eISSN - 1520-6874
pISSN - 1096-4762
DOI - 10.1002/tie.22207
Subject(s) - corporate governance , shareholder , business , panel data , emerging markets , accounting , affect (linguistics) , salient , monetary economics , finance , economics , econometrics , linguistics , philosophy , artificial intelligence , computer science
Ownership concentration remains a salient institutional feature among public listed firms in emerging and transitional economies. This study examines how a listed firm's ownership concentration interacts with its governance mechanisms in shaping corporate R&D investments. By analyzing panel data of Chinese listed firms between 2010 and 2012, I have three core findings. First, ownership concentration by the largest controlling shareholder negatively affects a firm's R&D intensity, but a small team of shareholders' ownership concentration plays a positive role. Second, a firm's monitoring mechanisms (measured by its sizes of the board and independent directors) and CEO stockholding positively affect the firm's R&D input. Third, CEO stockholding's positive role in promoting firm R&D is stronger in the firms with a more dispersed ownership structure. This study discloses the ways ownership concentration influences corporate governance and, in turn, affects corporate innovation.