Mitigating managerial short-sightedness in green technology innovation and corporate financial performance: The role of “National Team” shareholding

Jie Jiang, Julian Seng, Wenjin Huo and Jingwen Shi

International Review of Financial Analysis, 2024, vol. 96, issue PA

Abstract: The potential for green technology innovation (GTI) to enhance corporate financial performance continues to be the core motivation for sustained investment by companies. However, the micro-mechanisms to enhancing financial performance have not yet received sufficient attention in the academic literature. Internal corporate governance and corporate management constitute crucial factors that affect the process in which GTI contributes to corporate technological progress, and to the enhancement of corporate financial performance. Specifically, this paper will examine the role of “National Team” shareholding in corporate governance in mitigating managerial short-sightedness in GTI. A two-way fixed effects panel OLS model will be applied for individual-time on 618 listed companies with consistent R&D activities from 2015 to 2022. The results show that corporate GTI promotes corporate financial performance via technological progress. Through the conditional process analysis, it shows that the interaction of CEO narcissism and the “National Team” shareholding proportion together moderate the relationship between corporate GTI and technological progress, with the “National Team” shareholding proportion contributing to the impact of technological progress on corporate financial performance. From a corporate governance point of view, the presence of institutional investors helps mitigate the negative impact of managerial short-sightedness in technological progress.

Keywords: Green technology innovation; Financial performance; Technological progress; CEO narcissism; ‘National Team’ shareholding (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:96:y:2024:i:pa:s1057521924005544

DOI: 10.1016/j.irfa.2024.103622

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