Technological Innovation, Risk-Taking and Firm Performance—Empirical Evidence from Chinese Listed Companies

Abstract

Technological innovation can restructure the production factors of enterprises, and it is an important factor for enterprises to meet market demand, improve competitiveness, form long-term competitive advantages and obtain sustainable development. This study focuses on the practical issue of the impact of technology innovation on firm performance. Taking 1166 listed companies in China from 2012 to 2020 as research samples, this study systematically investigates and reveals the impact of technological innovation on firm performance and its internal impact mechanism. The research shows that technological innovation significantly reduces firm performance, and that conclusion holds after an endogeneity test and a robustness test. The analysis of the impact mechanism shows that risk-taking is an important transmission path of corporate technological innovation affecting corporate performance and that technological innovation reduces firm performance by improving the risk-taking capacity. Finally, a heterogeneity test regarding the firm ownership shows that technological innovation has a significantly stronger negative impact on the performance of non-state-owned enterprises than on that of state-owned enterprises. The relevant government departments and market subjects should fully understand and give attention to the impact of enterprise technological innovation on firm performance and its mechanism, which has important practical significance for standardizing and strengthening enterprise R&D management, reducing the market and technological risks of firm technological innovation and perfecting modern enterprise systems. It is helpful for firms to form a sustainable technology innovation cycle development mode.