Decision rights allocation and innovation: Evidence from China's listed business groups

Zhukun Lou and Mingyang Zhu

Finance Research Letters, 2021, vol. 39, issue C

Abstract: This study investigates the impact of decision rights allocation in business groups on innovation performance. Using a sample of A-share manufacturing listed companies in China for 2009–2017, we find that group centralization has an inverted U-shaped relationship with innovation performance. This result suggests that moderate centralization is conducive to improving a group's innovation performance. Further, we determine that the relationship between group centralization and innovation performance varies according to the nature of ownership, growth opportunities, and market competition. State-owned property and growth opportunities of a group negatively moderate the relationship between group centralization and innovation performance; market competition positively moderates that relationship.

Keywords: Business groups; Centralization; Innovation (search for similar items in EconPapers)
JEL-codes: G32 G34 O32 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:39:y:2021:i:c:s1544612320301197

DOI: 10.1016/j.frl.2020.101572

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