Standing on the shoulders of giants: The innovation capability acquisition of group affiliates

Jun Shao, Junjie Wang and Junzi Zhang

Finance Research Letters, 2025, vol. 78, issue C

Abstract: This paper explores the influence of business group on its listed affiliates(LAFs)’ innovation capability. Based on the data of Chinese A-share business groups and their LAFs, we find that, compared to stand-alone firms, group affiliation attributes significantly enhance LAFs’ innovation capabilities. Mechanism tests show that mitigating financial constraints, technical and industry supporting improve LAFs’ innovation capabilities. Heterogeneity analysis further reveals that the group's control capability, the advanced degree of management system, the absorptive capacity, and pyramids structure exert differentiated effects on LAFs’ innovation capability.

Keywords: Affiliates; Innovation capability; Financing channel; Technical support; Industrial support (search for similar items in EconPapers)
JEL-codes: G32 G34 O31 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:78:y:2025:i:c:s1544612325003782

DOI: 10.1016/j.frl.2025.107115

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