TY - JOUR
T1 - Shareholder involvement and firm innovation performance
T2 - Empirical evidence from Chinese firms
AU - Zhang, Feng
AU - Zhu, Lei
AU - WEI, Liqun
N1 - Funding Information:
This study was supported by the National Natural Science Foundation of China (grant number 71704056); the Natural Science Foundation of Guangdong Province (CN) (Grant No. 2019A1515011023); and the Fundamental Research Funds for the Central Universities [grant number x2gsC2181500].
PY - 2020/4/13
Y1 - 2020/4/13
N2 - Purpose: Whether shareholders’ involvement in management benefits the organization’s performance remains inconclusive. The purpose of this study is to reconcile the conflicting results by exploring whether and under which contexts shareholder involvement may impact firm innovation performance. Design/methodology/approach: This study attempts to combine previous theoretical views (reactance and agency theories) to examine a curvilinear effect of shareholder involvement on firm innovation performance based on governance related to cost-benefit analysis. Drawing on data from 174 Chinese manufacturing firms, the hierarchical regressions were used to test the hypotheses. Findings: The study finds that shareholder involvement has a U-shaped relationship with firm innovation performance. Moreover, ownership incentive strengthens the U-shaped relationship, while monitoring weakens it. Originality/value: Examination of the U-shaped main effect of shareholder involvement and these contingent factors further explains the mixed empirical results concerning the link between shareholder activism and firm-level performance.
AB - Purpose: Whether shareholders’ involvement in management benefits the organization’s performance remains inconclusive. The purpose of this study is to reconcile the conflicting results by exploring whether and under which contexts shareholder involvement may impact firm innovation performance. Design/methodology/approach: This study attempts to combine previous theoretical views (reactance and agency theories) to examine a curvilinear effect of shareholder involvement on firm innovation performance based on governance related to cost-benefit analysis. Drawing on data from 174 Chinese manufacturing firms, the hierarchical regressions were used to test the hypotheses. Findings: The study finds that shareholder involvement has a U-shaped relationship with firm innovation performance. Moreover, ownership incentive strengthens the U-shaped relationship, while monitoring weakens it. Originality/value: Examination of the U-shaped main effect of shareholder involvement and these contingent factors further explains the mixed empirical results concerning the link between shareholder activism and firm-level performance.
KW - Incentive and monitoring mechanisms
KW - Innovation performance
KW - Large shareholder involvement
KW - Shareholder activism
UR - http://www.scopus.com/inward/record.url?scp=85083450381&partnerID=8YFLogxK
U2 - 10.1108/CMS-01-2019-0029
DO - 10.1108/CMS-01-2019-0029
M3 - Article
AN - SCOPUS:85083450381
SN - 1750-614X
VL - 14
SP - 833
EP - 855
JO - Chinese Management Studies
JF - Chinese Management Studies
IS - 3
ER -