Accounting information quality, firm ownership and technology innovation: Evidence from China

Chengrui Zhang, Zhaohong Li, Jiaqian Xu and Yiyang Luo

International Review of Financial Analysis, 2024, vol. 93, issue C

Abstract: This study investigates whether and how accounting information quality (AIQ) affects innovation quality in emerging markets. Using a dataset of Chinese listed firms from 2009 to 2021, the results show that higher AIQ significantly boosts innovation, and the positive association is more pronounced for invention patents than non-invention patents. Moreover, AIQ improves the innovation efficiency of state-owned enterprises (SOE) more than non-state-owned enterprises (NSOE), whereas AIQ promotes the innovation output of NSOE more than SOE. In SOE, the governance role of AIQ contributes to greater innovation efficiency by monitoring resource allocation, while in NSOE, the implicit contracting role of AIQ motivates innovation efforts by reducing managers' career risks. Further analysis indicates that the positive relation between AIQ and innovation quality is more pronounced for firms with more severe agency conflicts and located in higher intellectual property protection regions. This research contributes to the literature on corporate governance and economic growth by identifying the different roles of AIQ in innovation across firm ownerships in the emerging market.

Keywords: Accounting information; Firm ownership; Technological innovation; Agency conflict; Proprietary cost (search for similar items in EconPapers)
JEL-codes: G30 G32 M40 M41 O31 O32 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:93:y:2024:i:c:s1057521924000504

DOI: 10.1016/j.irfa.2024.103118

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