Board Governance, Financing Constraints and Technological Innovation: Empirical Evidence from Parent Companies of Enterprise Groups — Oak Academic Publishing
Research ArticleOpen AccessGoogle Scholar indexed
Board Governance, Financing Constraints and Technological Innovation: Empirical Evidence from Parent Companies of Enterprise Groups
School of Economics, Wuhan University of Technology, Wuhan, China
,
School of Economics, Wuhan University of Technology, Wuhan, China
1 School of Economics, Wuhan University of Technology, Wuhan, China
2 School of Economics, Wuhan University of Technology, Wuhan, China
Based on the sample of A-share group listed companies and their parent companies from 2015 to 2019, this paper empirically analyzes the relationship among board governance, financing constraints and technological innovation using the intermediary effect model. The results show that improving the board governance level of the parent company can significantly improve the innovation capability of enterprise groups. The financing constraint plays a partial intermediary role in the relationship between the board governance of the parent company and technological innovation, that is to say, the improvement of the board governance of the parent company can effectively alleviate the financing constraint problem faced by enterprise groups to a certain extent, and then enhance the group’s technological innovation ability. Therefore, in order to improve the technological innovation ability of enterprise groups, enterprise groups should further optimize the governance level of the board of directors of the parent company, reduce operating costs, and relieve the financing pressure faced by enterprise groups in the process of innovation.
Belenzon, S., & Berkovitz, T. (2010). Innovation in Business Groups. Management Science, 56, 519-535. https://doi.org/10.1287/mnsc.1090.1107
Buchuk, D., Larrain, B., Munoz, F., & Francisco Urzúa, I. (2014). The Internal Capital Markets of Business Groups: Evidence from Intra-Group Loans. Journal of Financial Economics, 112, 190-212. https://doi.org/10.1016/j.jfineco.2014.01.003
Cai, W., Ni, X., Zhao, P., & Yang, T. (2019). The Impact of Enterprise Groups on Innovation Output: Empirical Evidence from Listed Manufacturing Companies. China’s Industrial Economy, 1, 137-155.
Chen, J., Xie, F., & Jia, L. (2006). Research on the Mechanism of Collaborative Innovation within Enterprise Groups. Journal of Management, 10, 733-740.
Chen, Z., & Zheng, L. (2016). The Relationship between Corporate Autonomy and Performance under Uncertainty. Nankai Management Review, 19, 91-100.
Demerjian, P., Lev, B., & McVay, S. (2012). Quantifying Managerial Ability: A New Measure and Validity Tests. Management Science, 58, 1229-1248. https://doi.org/10.1287/mnsc.1110.1487
Gao, M., & Fang, F. (2014). The Effect of Board Governance and Financial Governance: An Empirical Test Based on Accrual and Real Activity Earnings Management. Economics and Management Research, 8, 108-119.
Gu, Q., & Zhai, S. (2012). Financing Constraints, Agency Costs and Corporate Innovation Efficiency: Empirical Evidence from Listed High-Tech Enterprises. Economics and Management Research, 5, 73-80.
Hadlock, C. J., & Pierce, J. R. (2010). New Evidence on Measuring Financial Constraints: Moving beyond the KZ Index. Review of Financial Studies, 23, 1909-1940. https://doi.org/10.1093/rfs/hhq009
Hu, T., Li, D., & Guo, Z. (2020). Executive Adjunct and Firm Innovation: Empirical Evidence from Group Listed Companies and Their Subsidiaries. Investment Research, 39, 34-64.
Huang, H., Wang, W., & Niu, Y. (2020). Financial Ecological Environment, We-Media Information Disclosure and Enterprise Investment Scale—Testing of Mediation Effect Based on Financing Cost. Research on Financial Development, 11, 10-20.
Huang, J., & Chen, X. (2011). Group Management and Enterprise R&D Investment: Based on the Perspective of Enterprise R&D Investment Knowledge Spillover and Internal Capital Market. Economic Research, 46, 80-92.
Huang, Q., Chen, X., Zhang, F., & Zhou, Y. (2017). A Study on the Impact of CEO’s Two Jobs on Technological Innovation of Enterprises. The Research Management, 38, 69-76.
Li, C., Yan, X., Song, M., & Yang, W. (2020). Financial Technology and Enterprise Innovation: Evidence from NEEQ Listed Companies. China’s Industrial PA.
Li, D., & Yang, R. (2020). The Intrinsic Characteristics of the Board of Directors and the Performance of Listed Companies: From the Perspective of Board Capital and Board Independence. Journal of Capital University of Economics and Business, 22, 79-90.
Li, W., Xue, L. et al. (2012). Innovation Governance of Large Enterprise Groups (pp. 15-18). Science Press.
Liu, C., Zhang, J., & Bao, X. (2010). Game Analysis of Cooperative Technological Innovation within Enterprise Groups. Science and Technology and Economics, 23, 90-92.
Liu, X., & Jiang, Q. (2012). Research on the Influence of the Characteristics of the Board of Directors of Entrepreneurial Enterprises on the R&D Investment of Enterprises— Evidence from GEM Enterprises. Rural Finance Research, 9, 42-48.
Liu, X., & Zhang, J. (2010). An Empirical Study on Corporate Governance and Innovation Capability of China’s listed banks. Journal of Chongqing University (Social Science Edition), 16, 44-48.
Lou, Z., Huang, Y., & Chen, S. (2019). Cash Distribution, Governance Mechanism and Innovation Performance. Science Research Management, 40, 202-212.
Lu, T., & Dang, Y. (2014). Corporate Governance and Technological Innovation: A Comparison by Industry. Economic Research Journal, 49, 115-128.
Ma, G., Liu, M., & Yang, E.-Y. (2014). Bank Credit. Journal of Financial Research, 7, 76-93.
Qiao, X. (2012). Design of the Governance Structure of Parent and Subsidiary Companies Based on Management and Control Objectives. Modern Management Science, 9, 103-105.
Qu, L., Zhang, J., & Hao, Y. (2014). How Can Independent Directors Improve Corporate Performance: Interpretation of the Mechanism Based on the Four-Tier Principal-Agent Embedded Model. China Industrial Economy, 7, 109-121.
She, N. (2015). How Internal Control and External Auditing Can Suppress Agency Costs. Accounting and Accounting Communications, 21, 33-35.
Sun, J., & Yin, F. (2020). The Impact of Strategic Difference on Enterprise Technological Innovation: The Mediating Role of Agency Cost. Science and Technology Progress and Countermeasures, 38, 75-84. https://doi.org/10.3724/SP.J.1042.2014.00731
Wang, F., & Chen, F. (2018). Board Governance, Environmental Regulation and Green Technology Innovation: An Empirical Test Based on Listed Companies in my country’s Heavy Pollution Industries. Science Research, 36, 361-369.
Wen, Z., & Ye, B. (2014). Analysis of Mediating Effect: Method and Model Development. Advances in Psychological Science, 22, 732-745.
Xiao, L. (2016). How Does Corporate Governance affect Enterprise R&D Investment?－Experience from China’s Strategic Emerging Industries. Industrial Economy Research, 1, 60-70.
Xie, X. (2014). Enterprise Group Transformation: Reconstruction of Efficient Business Operation Management System (pp. 68-69). China Economic Press.
Yan, Z., Liang, S., & Yuan, C. (2019). Vertical Adjunct of Senior Management, Institutional Environment and Firm Innovation. Economic Management, 1, 90-107.
Zhang, J., Jin, H., & Li, G. (2015). Research on Driving Factors of Corporate Governance of Enterprise Technological Innovation. Modern Management Science, 10, 106-108.
Zhang, X., & Guo, L. (2014). Review and Future Prospects of Overseas Interlocking Director Network Research. Foreign Economics and Management, 36, 69-80.
Zhang, X., Chen, G., & Hai, B. (2019). Financing Constraints, Government Subsidies and Innovation Performance of Industry-University-Research Cooperation. Scientific Research, 37, Article No. 1529.
Zhang, X., Gao, J., & Li, C. (2020). Competition and Resource Misallocation in Banking Industry: Evidence from Chinese Industrial Enterprises. International Finance Research, 6, 54-63.
Zhao, X., & Wen, J. (2011). Board Governance and Enterprise Technological Innovation: Theory and Empirical Research. Contemporary Economic Sciences, 33, 110-116+128.
Zhou, F., & Zhang, J. (2017). Trade Liberalization, Financing Constraints and Enterprise Innovation: An Empirical Study from Chinese Manufacturing Enterprises. Contemporary Finance and Economics, 6, 100-108.
Zhou, J. (2018). Independent Directors and Enterprise Innovation Performance from the Perspective of Social Network. The Financial Review, 4, 75-82.
Zona, F., Zattoni, A., & Minichilli, A. (2013). A Contingency Model of Boards of Directors and Firm Innovation: The Moderating Role of Firm Size. British Journal of Management, 24, 299-315. https://doi.org/10.1111/j.1467-8551.2011.00805.x