Asia-Pacific Journal of Business (아태비즈니스연구)

KNU The Institute of Management & Economy Research (강원대학교 경영경제연구소)
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The Effect of Corporate Ownership Structure on Technological Innovation: Evidence from Chinese Listed Companies

기업의 지분구조 특성이 기술 혁신에 미치는 영향: 중국 상장기업을 중심으로

  • Yuying Chen (Graduate School, Chung-Ang University) ;
  • Eunjung Yeo (School of Business Administration, Chung-Ang University)
  • 진옥영 (중앙대학교 대학원 경영학 ) ;
  • 여은정 (중앙대학교 경영학부)
  • Received : 2024.08.30
  • Accepted : 2024.09.25
  • Published : 2024.09.30
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Abstract

Purpose - This study investigates the relationship between corporate ownership structure and technological innovation for Chinese listed firms. Specifically, we analyze four ownership characteristics: concentration, constraints, alignment, and foreign/domestic institutional investor ownership, and use patent applications to measure innovation. Design/methodology/approach - Employing a quantitative research design, this study uses panel data of Chinese listed companies during the period from 2015 to 2021. The empirical analysis relies on multiple regression models, including Tobit models and two-stage least squares estimation, to assess the relationship between corporate ownership structure characteristics and innovation. Robustness checks are conducted using lagged dependent variables and subgroup analyses based on firm age, ownership type, and stock exchange listing. Findings - First, it provides empirical evidence on the non-linear relationship between ownership concentration and innovation, suggesting that there is an optimal level of ownership concentration for promoting innovation. Second, it highlights the importance of equity constraints in influencing innovation, showing that both excessive and insufficient equity constraints can hinder innovation. Third, the study demonstrates the negative impact of aligned ownership and control on innovation, suggesting that separation of ownership and control may be beneficial for fostering innovation. Fourth, it sheds light on the differential impact of domestic and foreign institutional investors on innovation, suggesting that foreign institutional investors may play a more positive role in promoting innovation. Research implications or Originality - The significance of this study's results lies in the fact that we empirically analyze the relationship between corporate ownership characteristics and technological innovation, thereby suggesting the direction of a desirable corporate governance structure that listed companies should pursue depending on their circumstances. This research contributes to a deeper understanding of the ownership characteristics that influence technological innovation and provides valuable insights for policymakers and corporate managers.

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