Internal controls and corporate technological innovation: Empirical evidence from Chinese listed companies

Nannan Wang and Dengfeng Cui
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Nannan Wang: School of Economics and Management, Shihezi University, Shihezi 832000, Xinjiang
Dengfeng Cui: School of Economics and Management, Shihezi University, Shihezi 832000, Xinjiang

Journal of Information Economics, 2023, vol. 1, issue 2, 65-79

Abstract: As the underlying institutional design for enterprise risk management, it is important to study whether and how internal control affects enterprise technological innovation in the current context of increased economic policy uncertainty. Based on the principal-agent theory and information asymmetry theory, this paper explores the impact of internal control on corporate technological innovation using the listed company data from 2009-2019 CSMAR database, and obtains the following research conclusions: (1) the quality of internal control positively affects the corporate technological innovation. (2) The operational risk plays an intermediary role in the relationship between the internal control affecting the corporate technological innovation. (3) The degree of market competition positively moderates the impact of internal control on enterprise technological innovation. (4) Relative to non-stateowned enterprises and non-high-tech enterprises, the quality of internal control of state-owned enterprises and high-tech enterprises has a more significant impact on enterprise technological innovation. This paper enriches the consequences of the study of internal control on the one hand, and on the other hand, it provides a new perspective for improving technological innovation, and it provides certain guidance for further improving the level of corporate governance.

Keywords: Internal control quality; Technological innovation; Business risk; Marketability (search for similar items in EconPapers)
Date: 2023
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