Ownership structure and innovation: An emerging market perspective

By Victor Zitian Chen, Jing Li, Daniel M. Shapiro, Xiaoxiang Zhang. Asia Pacific Journal of Management, 2013

294 citations recorded by the source corpus.

Considerable attention has been focused on the ways in which emerging market firms can obtain and mobilize the knowledge and resources required for innovation. Innovation is a particular challenge in emerging markets because of inadequate external institutions. In this study, we focus on the importance of ownership structure, and in particular on ownership type diversity and ownership concentration. Using transaction cost and agency theories embedded in an emerging market context, we argue that ownership structure provides an important mechanism by which firms can assemble and direct the resources necessary for innovation in the context of inadequate external institutions. Specifically, we hypothesize that ownership type diversity improves innovation performance and that increasing ownership concentration has the same effect, but only up to a point. Using a panel dataset of 487 and 475 Chinese listed companies during 2004–2005 and 2005–2006 respectively, we find supportive empirical evidence for our hypotheses. Our findings also suggest that ownership type diversity is a more important factor in explaining innovation performance than ownership concentration, although most of the extant literature focuses on the latter.

Subfields: Accounting, Organizational Behavior and Human Resource Management

View Paper: https://www.semanticscholar.org/paper/aa2eee444f62c2e93f0cfa40ad105dfc6572658d

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Citations in the corpus

Varieties in state capitalism and corporate innovation: Evidence from an emerging economy (2021, methodology): “Furthermore, central SOEs enjoy more preferential policies, such as more inexpensive access to credit and easier access to the talent pool, than their local and private peers (Li et al., 2014).”
State Ownership and Firm Innovation in China: An Integrated View of Institutional and Efficiency Logics (2017, background): “In China, state-owned banks, which prioritize SOEs as their top clients, control most of the lending capital (Chen et al., 2014).”
Mergers and acquisitions in and out of emerging economies (2015, result): “As for M&A returns for target firms, the findings for EE appear to be consistent with the general notion of positive returns on acquisitions for target firms (Chari, Chen, & Dominguez, 2012; Goddard, Molyneux, & Zhou, 2012; Liao & Williams, 2008). However, Chen (2011) shows that performance conseque”