Competitive imitation and corporate innovation in private enterprises

Feng He, Longxuan Chen and Haomin Wu

International Review of Financial Analysis, 2024, vol. 95, issue PB

Abstract: The private economy has always been an important force in promoting the development of China's national economy. The unfair competition faced by private enterprises (PEs) compared to that faced by state-owned enterprises (SOEs) in many areas will induce the competitive imitation of PEs. We find that PEs' competitive imitation strategy significantly inhibits innovation, while increased agency costs and reduced R&D investment are the two main mechanisms for this inhibitory effect. Furthermore, we find that this effect is stronger in firms with lower growth rate, worse information environment and stronger product market competition. However, the competitive imitation of PEs will eventually damage their innovation efficiency.

Keywords: Private enterprises; Competitive imitation; State-owned enterprises; Innovation (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:95:y:2024:i:pb:s1057521924003363

DOI: 10.1016/j.irfa.2024.103404

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