Equity structure and corporate innovation performance: Evidence from Chinese high-tech companies

Area of Science:

• Business Administration
• Corporate Finance
• Innovation Management

Background:

• Enhancing business innovation performance is crucial for economic growth in a globalized, technological era.
• Equity structure significantly influences corporate innovative activities, yet its multifaceted impact requires deeper investigation.
• External environmental factors, like market competition, also play a role in shaping innovation performance.

Purpose of the Study:

• To investigate the impact of equity structure on the innovation performance of high-tech listed companies.
• To examine the mediating role of R&D investment and the moderating effect of market competition.
• To address research gaps concerning the comprehensive influence of equity structure and external factors on innovation.

Main Methods:

• Utilized a bidirectional fixed-effects regression model.
• Analyzed unbalanced panel data from high-tech listed companies (2012-2021).
• Incorporated R&D investment as a mediator and market competition as a moderator.

Main Results:

• An inverted U-shaped relationship exists between equity ownership concentration and innovation performance.
• Equity checks and balances positively impact innovation performance, while R&D investment mediates the equity structure-innovation performance link.
• Market competition moderates the ownership concentration-innovation performance relationship, but equity checks and balances do not significantly moderate innovation performance.

Conclusions:

• Equity structure, R&D investment, and market competition interact to influence innovation performance.
• Findings offer practical guidance for optimizing shareholding structures and R&D strategies in high-tech firms.
• Results provide a theoretical basis for policymakers aiming to foster corporate innovation and support high-tech firm development.