Abstract
Innovations are the foundation of an enterprise’s sustainable development, which is particularly important for sports firms in an evolving Chinese sport industrial environment. Analyzing publicly-listed sports firms on The New Third Board (NTB) in China, this study examined the influence of corporate financial capability and corporate governance structure on firms’ R&D intensity through a series of multiple regression models. Findings revealed that corporate financial capability is an important determinant of R&D intensity, and corporate governance structure has a small but meaningful effect on R&D intensity. Specifically, for Chinese sports firms, several financial capability indicators, such as return on equity, accounts receivable turnover, assets turnover, and profit growth rate, have positive relationships with R&D intensity; however, other financial capability indicators, such as leverage and cash flow, have negative relationships with R&D intensity. Limited evidence was found to support the notion that corporate governance significantly influences R&D intensity, although sports firms with good governance mechanisms are more likely to increase the positive effects of financial capabilities on R&D intensity while decreasing the negative effects. Discussions were centered on planning and executing R&D activities in sports companies.
Highlights
Social, psychological, economic, and environmental impacts of organized sports activities and sports events are well-documented in previous studies [1]
The results of model 1 indicated that corporate financial capability directly explained 50% of the variance in firms’ Research and Development (R&D) intensity (F (10, 72) = 7.201, p < 0.01)
This study empirically examined the effects of corporate governance structure and corporate financial capability on R&D intensity in the context of sports firms listed on The New Third Board in China
Summary
Psychological, economic, and environmental impacts of organized sports activities and sports events are well-documented in previous studies [1]. Teams, and events, the most popular leisure and entertainment options, have been integral to many communities’ cultural and economic foundations in western countries [3] Such strong market demand and such competitive sports firms in China lacked before 2014, and the total output of the sports industry in China was only 1.1 trillion RMB in 2013. The international nature of modern sport requires sport organizations to modify their management practices in order to remain effective and competitive in a border-transcended marketplace [4] Differences in such areas as culture, policy and regulation, language, and the environment in global, national, regional, and local communities make this a challenging task. This requires that continual innovation is implemented to promote the rapid and sustainable development of the Chinese sports industry
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