Independent Directors and Enterprise Technology Innovation
- 1 School of Finance, Shandong University of Finance and Economics, Jinan, China
- 2 School of Finance, Shandong University of Finance and Economics, Jinan, China
Abstract
Based on the data of A-share listed companies from 1996 to 2016, the paper uses the panel double fixed model to study the impact of the company’s transition to a larger proportion of independent directors on corporate innovation behavior. It is concluded that the increase in the proportion of independent directors of the company can make the number of patents of the company significant. Increased conclusions. Compared with invention patents, non-invention patent applications have increased more, and the increase in independent directors has prompted managers to pay more attention to the benefits and risks of innovation. At the same time, based on the DID model, this paper analyzes the impact of the minimum independent director policy ratio on the company’s innovation activities. The study finds that the minimum independent director ratio policy allows private companies to lower their minimum proportion of companies and increase their strategic innovation behavior, instead of seeking exploration and breakthroughs in new technologies.
- Hu, Y.M. and Tang, S.L. (2008) The Quality of Surplus Information of Independent Directors and Listed Companies. Management World, No. 9, 149-160.
- Fama, E.F. and Jensen, M.C. (1983) Separation of Ownership and Control. The Journal of Law and Economics, 26, 301-325. https://doi.org/10.1086/467037
- Williamson, O.E. (1983) Credible Commitments: Using Hostages to Support Exchange. The American Economic Review, 73, 519-540.
- Weisbach, M.S. (1988) Outside Directors and CEO Turnover. Journal of Financial Economics, 20, 431-460. https://doi.org/10.1016/0304-405X(88)90053-0
- Stiglitz, J.E. and Weiss, A. (1983) Incentive Effects of Terminations: Applications to the Credit and Labor Markets. American Economic Review, 73, 912-927.
- Harris, M. and Raviv, A. (1978) Some Results on Incentive Contracts with Applications to Education and Employment, Health Insurance, and Law Enforcement. American Economic Review, 68, 20-30.
- Holmstrom, B. (1979) Moral Hazard and Observability. The Bell Journal of Economics, 10, 74-91. https://doi.org/10.2307/3003320
- Holmstrom, B. and Milgrom, P. (1991) Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design. Journal of Law, Economics and Organization, 7, 24-52. https://doi.org/10.1093/jleo/7.special_issue.24
- Balsmeier, B., Fleming, L. and Manso, G. (2017) Independent Boards and Innovation. Journal of Financial Economics, 123, 536-557. https://doi.org/10.1016/j.jfineco.2016.12.005
- Li, W.J. and Zheng, M.N. (2016) Substantial Innovation or Strategic Innovation?—The Impact of Macro-Industrial Policy on Micro-Enterprise Innovation. Economic Research, 51, 60-73.
- Harris, M. and Raviv, A. (2008) A Theory of Board Control and Size. Review of Financial Studies, 21, 1797-1832. https://doi.org/10.1093/rfs/hhl030
- Zhou, X., Cheng, L.R. and Wang, W. (2012) The Higher the Level of Technological Innovation, the Better the Financial Performance of Enterprises?—An Empirical Study Based on the Patent Application Data of Chinese Pharmaceutical Listed Companies in 16 Years. Financial Research, No. 8, 166-179.
- Cohen, L., Diether, K. and Malloy, C. (2013) Misvaluing Innovation. Review of Financial Studies, 26, 635-666. https://doi.org/10.1093/rfs/hhs183