Abstract
Based on the data of A-share listed companies from 1996 to 2016, the paper uses the panel double fixed model to study the impact of the company’s transition to a larger proportion of independent directors on corporate innovation behavior. It is concluded that the increase in the proportion of independent directors of the company can make the number of patents of the company significant. Increased conclusions. Compared with invention patents, non-invention patent applications have increased more, and the increase in independent directors has prompted managers to pay more attention to the benefits and risks of innovation. At the same time, based on the DID model, this paper analyzes the impact of the minimum independent director policy ratio on the company’s innovation activities. The study finds that the minimum independent director ratio policy allows private companies to lower their minimum proportion of companies and increase their strategic innovation behavior, instead of seeking exploration and breakthroughs in new technologies.
Highlights
Independent directors are an important part of the design of modern corporate governance mechanisms
The study finds that the minimum independent director ratio policy allows private companies to lower their minimum proportion of companies and increase their strategic innovation behavior, instead of seeking exploration and breakthroughs in new technologies
Some scholars previously believed that independent directors are different from other directors of the company, and independent directors may not have much to do with corporate governance
Summary
Independent directors are an important part of the design of modern corporate governance mechanisms. This paper uses the panel fixed effect and the empirical method of double difference to study: 1) It is found that the company’s transition to a more independent board of directors can significantly increase the number of patent applications of the company; the number of non-invention patent applications has increased more than the invention patents, and the increase of independent directors has made managers pay more attention to the improvement in performance, especially the benefits and risks of innovation. Using the policy exogenous shock of the independent director system reform, the panel data double difference model is constructed to study the impact of the independent director system reform of listed companies on enterprise technology innovation, and effectively alleviate the endogenous problems of listed companies in China.
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