Promote Enterprise Innovation Research Articles

Environmental regulation and enterprise behavior in China: rent-seeking or innovation?

While the Porter hypothesis posits that well-functioning markets and government regulations can promote enterprise innovation, it remains less clear in developing and transition economies. To address this gap, we utilize enterprise data from China’s A-share market between 2005 and 2017 to empirically examine whether implementing more stringent environmental regulation will prompt regulated enterprises to engage in rent-seeking or innovative behavior. Our findings reveal that regulated enterprises increase both their rent-seeking and innovation efforts in response to environmental regulation. Importantly, enterprises exhibiting lower levels of rent-seeking demonstrate more substantial increases in rent-seeking expenditure when confronting environmental regulation. Furthermore, we discover that state-owned enterprises are more inclined to implement innovative behaviors, while foreign enterprises significantly reduce their innovative activities. This study highlights the complex relationship between environmental regulation and enterprise behavior in developing or transition economies.

The impact of factor tax structure on firm innovation: evidence from China

ABSTRACT Labor and capital are two of the most fundamental factors of production, and the ratio of labor to capital tax can reflect the structure of factor tax. Despite the existing literature demonstrating the impact of taxation on enterprise innovation, few studies have addressed the effect of changes in factor tax structure on enterprise innovation. Using provincial tax data and listed company data from China between 2006 and 2017, this study empirically tests the impact of factor tax structure on enterprise innovation using the Poisson quasi-linear method. The findings indicate that a higher share of labor tax and a lower share of capital tax tend to inhibit enterprise innovation. Conversely, a higher tax compliance rate for labor tax and a lower compliance rate for capital tax are also unfavorable to enterprise innovation. A non-linear relationship is observed between factor tax structure and enterprise innovation, where a higher share of labor tax and a lower share of capital tax can promote enterprise innovation when exceeding a specific limit. The results of this study have theoretical and practical implications for improving factor tax structure, stimulating enterprise innovation, and promoting economic transformation toward higher quality.

Monocentricity or polycentricity? The study on the enterprise environmental performance of urban spatial structure

Under the promotion of urban planning and land development policies, the urban spatial structure of China is undergoing a transformation towards polycentricity. The improvement of environmental performance during the process of urban spatial transformation is crucial for urban sustainable development. This paper uses high-resolution population grid data from LandScan for the years 2001–2019 to measure the urban spatial structure of Chinese cities. Then we match the Chinese Industrial Enterprise Database with the Chinese Industrial Enterprise Pollution Emission Database for the years 2001–2014. This paper empirically examines the impact and mechanisms of the polycentric spatial structure of Chinese cities on enterprise pollution reduction at the micro-level. The findings indicate that compared to monocentricity, polycentricity is more conducive to improving enterprise environmental performance. Mechanism tests demonstrate that the improvement in enterprise environmental performance resulting from polycentricity can be achieved through three channels: increasing urban population and density, mitigating urban environmental pollution, and promoting enterprise innovation ability. Heterogeneity analysis reveals that polycentricity is more beneficial for emission reduction among small enterprises, young enterprises and enterprises in regions with higher environmental regulations. This paper provides micro-level evidence and policy implications for further strengthening the aggregation effect of polycentricity and improving enterprise environmental performance in the future.

Mystery of special government subsidies: How does digital transformation promote enterprise innovation and development?

The digital transformation of enterprises has become an important driving force in promoting the high-quality development of China's economy and in-depth implementation of an innovation-driven development strategy. To this end, this study uses the panel data of China's A-share listed enterprises from 2010 to 2019 to explore the relationship among enterprise digital transformation, government subsidies, and innovation. Results indicated that digital transformation can significantly stimulate enterprise innovation. The impact mechanism test shows that the digital transformation of enterprises can increase their R&D expenditure and alleviate their financing constraints, thereby jointly promoting enterprise innovation in terms of innovation resources and financing resources. Furthermore, heterogeneity analysis indicates that digital transformation has a greater incentive effect on private enterprises, non-technology enterprises, service industries, and growth stage enterprises. By introducing special financial subsidies for digital transformation, special financial subsidies for digital transformation are shown to have a positive impact on the sensitivity of digital transformation and enterprise innovation. This effect is also played out through innovation spending and corporate finance, and the role of long-term financing is greater than that of short-term financing. Therefore, the role of digital transformation in promoting enterprise innovation must be actively played to achieve a high-quality development of the regional economy.

Emission reduction pressure and enterprise digital transformation: do enterprise innovation and digital economy matter?

PurposeCoordinating low-carbonization and digitalization is a practical implementation pathway to achieve high-quality economic development. Regions are under great emission reduction pressure to achieve low-carbon development. However, why and how regional emission reduction pressure influences enterprise digital transformation is lacking in the literature. This study empirically tests the impact of emission reduction pressure on enterprise digital transformation and its mechanism.Design/methodology/approachThis article takes the data of non-financial listed companies from 2011 to 2020 as a sample. The digital transformation index is measured by entropy value method. The bidirectional fixed effect model was used to test the hypothesis.FindingsThe research results show that emission reduction pressure forces enterprise digital transformation. The mechanism lies in that emission reduction pressure improves digital transformation by promoting enterprise innovation, and digital economy moderates the nexus between emission reduction pressure and digital transformation. Furthermore, the effect of emission reduction pressure on digital transformation is more significant for non-state-owned, mature and high-tech enterprises.Originality/valueThis paper discusses the mediating role of enterprise innovation between carbon emission reduction pressure and enterprise digital transformation, as well as the moderating role of digital economy. The research expands the body of knowledge about dual carbon targets, digitization and technological innovation. The author’s findings help update the impact of regional digital economy development on enterprise digital transformation. It also provides theoretical guidance for the realization of digital transformation by enterprise innovation.

Equity Incentive, R&D Input and Innovation Output: Based on the Analysis of Small and Medium-sized Enterprises

Under the influence of the general environment, many small and medium-sized enterprises are facing threats. However, some innovative enterprises continue to grow with innovation. This paper studies the relevant data of listed companies on the Growth Enterprise Market (GEM) from 2016 to 2021, aiming at exploring the relationship among equity incentives, research and development inputs and innovation outputs of small and medium-sized enterprises on the GEM. The research found that both equity incentive and R&D investment will bring positive impact on innovation output, and R&D expenditure plays an intermediary role between equity incentive and innovation results. It also inspires enterprises to alleviate the principal-agent problem through equity incentive in practice, to promote enterprise innovation and to promote the sustainable development of enterprises.

Corporate Innovation Mechanisms in The Yangtze River Delta Catalyzed by Digital Finance: Research on The Impact of Financing Constraints and Corporate Digital Transformation

Taking the data of Shanghai and Shenzhen A-share enterprises in 41 cities in the Yangtze River Delta (YRD) region from 2012 to 2022 as research samples, we constructed two-way stationary models, mediation models, and carried out research on the impact of digital finance on enterprise innovation in YRD. The results of full-sample regression show that digital finance has a positive role in promoting enterprise innovation, and all three sub-dimensions of digital finance have a significant role in promoting enterprise innovation. The results analysed through the mediation effect show that digital finance can promote the motivation of enterprise innovation by alleviating the financing constraints and providing more financing channels for enterprises, so that enterprises can have wider access to financing funds. By providing financing support, data analysis tools, cooperation platforms and technological innovation, digital finance effectively promotes the digital transformation of enterprises, which in turn promotes the innovative development of enterprises.

Can Urban Sprawl Promote Enterprise Innovation? Evidence from A-Share Listed Companies in China

Urban sprawl does not invariably impede factor agglomeration; rather, it can foster polycentric urban configurations, thereby enhancing productivity and encouraging enterprise innovation. This study investigates the effect of urban sprawl on enterprise innovation using data for A-share listed Chinese companies from 2010 to 2020. The results reveal a significant inverted U-shaped relationship between urban sprawl and enterprise innovation, particularly among large enterprises, well-established entities, non-state-owned enterprises, and those operating in non-manufacturing sectors. Additionally, the effects of urban sprawl on the inverted U-shaped relationship are more pronounced in the north-eastern regions and small cities. Regional integration significantly moderates the inverted U-shaped relationship between urban sprawl and enterprise innovation. This research contributes new insights to the field of enterprise innovation, offering theoretical and empirical support for analyzing the economic implications of urban sprawl.

Deleveraging, Debt Default Risk, and Enterprise Innovation: Evidence from China

This study, at the micro level, takes the Chinese central government's implementation of the "deleveraging" policy as a quasi natural experiment. Based on data from listed companies from 2013 to 2017, this study introduces the Metron default distance that balances financial indicators and asset value fluctuations to measure default risk. Therefore, the DID method is used to test the innovation situation of enterprises with high default risk under the "deleveraging" policy. Research has found that companies with significant default risks under policy shocks have significantly improved their innovation levels and increased their innovation achievements. Furthermore, this research studies the mechanism of the "deleveraging" policy on enterprise innovation from three perspectives: enterprise financing, investment, and business management. The implementation of the "deleveraging" policy will enhance the cash holdings and management governance level of enterprises with high default risk, thereby promoting enterprise innovation.

How Does Low-Carbon Financial Policy Affect Corporate Green Innovation?—Re-Examination of Institutional Characteristics, Influence Mechanisms, and Local Government Behavior

This paper employs a propensity score matching approach to construct a control group and estimate the impact of the CETS pilot policy, a low-carbon financial policy, on corporate green innovation and its impact mechanism in a difference-in-difference manner. The results show that the CETS pilot policy has a significantly positive effect on corporate green innovation. The higher the penalty degree and the carbon price, the more obvious the promotion of the green innovation of pilot enterprises. The mechanism test shows that the improvement of corporate green innovation is mainly due to the incentive effect rather than the anti-driving effect of the CETS pilot policy, that is, the policy promotes corporate green innovation by providing innovation resources and enhancing the willingness to innovate. Further analysis shows that only in regions where local governments have less competitive pressure can the CETS pilot policy effectively promote enterprise innovation resources and that a close and clean government–business relationship can help strengthen the promotion effect of the CETS pilot policy on the willingness of enterprises to innovate. Furthermore, this paper introduces its theoretical framework as a strategic tripod to explore the friction in the process of the CETS pilot policy affecting corporate green innovation from the perspective of the industry environment and corporate resources. This research shows that a lack of industry green technology and corporate human capital may hinder the positive impact of the CETS pilot policy on corporate green innovation. Finally, this study found that the CETS pilot policy has no significant impact on the quality of corporate green innovation, and the lack of industry green technology and corporate human capital may hinder the CETS pilot policy from improving the quality of corporate green innovation.

Government innovation awards, innovation funds acquisition and enterprise innovation

Government innovation awards (GIAs) are not only important science and technology (S&T) policies for stimulating innovation but also serve as innovation honors for enterprises. Based on signaling theory and expectancy-value theory, we construct an enterprise innovation reputation model, consider GIAs as a signal of innovation reputation, and empirically analyze how GIAs affect enterprise innovation. The findings confirm that GIAs can promote enterprise innovation and that enterprises’ high-quality innovation is more strongly promoted than their low-quality innovation. As a signal of innovation reputation, GIAs can help enterprises obtain external government S&T funds and S&T financial funds. The results show that government S&T funds acquisition plays a significant mediating role between GIAs and enterprise innovation output. These findings reveal the effect and micro mechanism of GIAs on enterprise innovation, can help deepen the understanding of innovation reputation and enterprise high-quality innovation, and can provide implications for innovation awards and financial policy-making.

Impact of the Establishment of Free Trade Area (FTA) on Corporate Innovation

This paper explores the impact of the establishment of FTA on corporate innovation and its mechanism of action using panel data of A-share-listed firms from 2008 to 2021 using the double difference method. The empirical findings show that the establishment of FTA can promote corporate innovation. And government subsidies can strengthen this promotion relationship, while financing constraints alleviate corporate innovation. The heterogeneity test finds that executives with overseas background and high-tech enterprises have alternative effects on enterprise innovation. The ownership nature of firms established in FTA that are non-SOEs plays a stronger role in promoting firm innovation. The empirical results of this paper provide some reference for the country to further broaden the scope of FTA in the future or how to utilize policies to promote enterprise innovation.

The Impact of Executive External Pay Disparity on Enterprise Innovation: Evidence from Mixed-Ownership Enterprises in China

ABSTRACT Reasonable compensation contract arrangements have long been an essential means of promoting the hard work of executives and enhancing corporate performance. While internal pay disparity and its incentive effects have garnered widespread attention, few studies have examined the impact of executive external pay disparity on enterprise innovation. Using panel data from Chinese mixed-ownership listed companies spanning from 2013 to 2020, this study explores how executive external pay disparity affects enterprise innovation. Our findings demonstrate that enterprise innovation is positively influenced by the disparity in executive external pay. This facilitating role is further strengthened in enterprises with a high level of board governance. Additionally, the benefits of executive external pay disparity for innovation are particularly evident in general commercial mixed-ownership enterprises. Mechanism tests reveal that executive external pay disparity plays a pivotal role in enhancing enterprise innovation by increasing corporate risk-taking, ultimately leading to improved enterprise value. This study not only enriches our understanding of the influencing factors behind enterprise innovation from a new perspective but also holds significant implications for deepening the reform of mixed ownership and promoting enterprise innovation through the optimization of compensation contract arrangements.

Global value chain embeddedness, technology spillover and enterprise innovation

Innovation is the first driving force for high-quality economic development, and the global value chain (GVC) with intermediate goods as the carrier is an essential channel for international technology spillovers. This paper conducts a comprehensive examination of the impact of GVC embeddedness on enterprise innovation from the perspective of two-way embedding. An empirical test using the UIBE GVC Indicators data, Chinese Industrial Enterprise data, China Customs data, and enterprise patent data shows that GVC embeddedness significantly promotes enterprise innovation. The effect of backward embeddedness is greater than that of forward embeddedness. However, the innovation effect of GVC embeddedness is heterogeneous due to different innovation types, embeddedness depths, ownership, trade patterns, and locations of enterprises. Meanwhile, the technology spillovers are an essential channel for GVC embeddedness to promote enterprise innovation. By uncovering the role mechanism of GVC embeddedness in influencing enterprise innovation from the perspective of technology spillovers, this paper offers a new way of thinking to fully unleash the innovation effect of GVC embeddedness.

Accounting integrity, borrowing capacity and corporate R&D input: Evidence from China

Accounting integrity regulates market order, enhances corporate financial credit, and empowers corporate innovation. This paper explores how the construction of an accounting integrity system in micro entities affects and plays a role in enterprises’ R&D input policies and uses a panel threshold regression model to study the nonlinear relationship between the two empirically. By constructing a mediation model, we examined the mediating effect of borrowing capacity on the impact of accounting integrity on corporate R&D input and performed a robustness test. Our findings include: (1) improving accounting integrity ensures the quality of accounting information in enterprises; (2) the facilitation effect of accounting integrity on corporate R&D input shows a single threshold effect, and the improvement of accounting integrity is increasingly conducive to corporate R&D input; and (3) accounting integrity increases enterprises’ chances of borrowing capacity, alleviating the financing constraints of enterprises, and promoting enterprise innovation.

The impact of ESG performance on firms’ technological innovation: evidence from China

Technological innovation is crucial for creating sustainable corporate value and shaping competitive advantage in the market. ESG, as an indicator of corporate value practices, plays a significant role in enterprise technological innovation. However, there is little empirical evidence to support this claim. This study analyzes the relationship between ESG performance and technological innovation in Chinese A-share listed enterprises from 2011 to 2021. The statistical data shows that strong ESG performance has a significant positive impact on corporate technological innovation. ESG performance can promote corporate technological innovation through external mechanisms, such as enhancing corporate network location and increasing institutional shareholding. Additionally, internal mechanisms, such as reducing labor costs and easing financing constraints, can also promote corporate technological innovation. The impact of ESG performance on corporations exhibits heterogeneity, with ESG performance promoting innovation more strongly among labor-intensive firms, non-state-owned firms, highly competitive industries, and mature firms. Based on the study results, it is recommended that enterprises actively practice ESG development concepts, optimize their equity structure, strengthen information communication with stakeholders, and alleviate problems such as information asymmetry to improve their technological innovation. The government should focus on enterprise characteristics, improve ESG development policies, and promote enterprise innovation through ESG performance.

Digital Financial Inclusion and Innovation of MSMEs

Digital inclusive finance is a new type of financial service that combines digital finance with inclusive finance. It is of great significance for improving the accessibility of financial services for small- and medium-sized enterprises and promoting their development. In this paper, we merge the Peking University Digital Financial Inclusion Index of China with the innovation data of micro-, small-, and medium-sized enterprises (MSMEs) from the National Bureau of Statistics, verify the facilitating effect of the development of digital financial inclusion on the technological innovation of MSMEs, and explain the mechanism of the influence of digital finance on the innovation of MSMEs from the perspective of alleviating financing constraints and promoting consumption. Digital inclusive finance has a promoting effect on the technological innovation of enterprises of different technological levels, but the support for high-tech enterprises is still insufficient. The heterogeneity analysis found that there are significant differences in the regional effects of digital financial inclusion; the central and western regions compared to the eastern region have better performance of digital inclusive finance to promote enterprise innovation.

Does the decoupling of industry associations from administrative authorities promote enterprise innovation? Evidence from China

ABSTRACT This paper examines the potential impact of the Industry Association Reform, aiming to decouple industry associations from administrative authorities, on enterprise innovation in China. To achieve this, we employ the difference-in-differences methodology, drawing on data sourced from the pharmaceutical industry. Our findings suggest that the reform has effectively enhanced enterprise innovation. Three critical mechanisms that underpin this positive effect are information sharing, knowledge spreading, and rent-seeking reduction. Furthermore, this enhancement in innovation is particularly conspicuous in enterprises with better R&D investment, executive incentives or decision-making system, and in more developed cities and among council members of industry associations.

Carbon Trading Market and Green Innovation of Enterprises—Based on the Triple Difference Model

This article takes Chinese manufacturing listed companies from 2000 to 2020 as the research object, based on enterprise green patent data, and adopts a double difference method to study the effect of carbon trading pilot policies, a quasi-natural experiment, on enterprise innovation. Research has found that: (1) The carbon trading pilot policy has significantly promoted green innovation in enterprises and increased their technological innovation efforts. This conclusion remains valid after a series of robustness tests and endogeneity treatments, including placebo testing, excluding the implementation of innovative city pilot policies, and interference from economic crises. (2) Mechanism testing has found that carbon trading pilot policies can significantly promote green innovation in enterprises by strengthening the effectiveness of environmental regulations and improving the cash flow situation of enterprises. (3) Heterogeneity analysis shows that the concentration of technology and the degree of equity dispersion in enterprises can affect the effectiveness of innovation. In response to the above conclusions, this article proposes suggestions for improving the carbon trading system, exploring multidimensional paths for carbon trading pilot projects to promote enterprise innovation, and improving policy adaptability, flexibility, and execution intensity. The research in this article provides policy inspiration for further improving the carbon trading market, enhancing the effectiveness of the carbon trading system, and fully leveraging the carbon market to promote green innovation for enterprises and achieve low-carbon development. It has reference significance for the construction and improvement of the national carbon market and promotes the improvement of national energy conservation and emission reduction policy planning.

Impact of Digital Transformation on Accelerating Enterprise Innovation—Evidence from the Data of Chinese Listed Companies

Under the background of the rapid development of digital economy, this paper empirically analyzes the impact of digital transformation on enterprise innovation and selects the panel data of China’s Shanghai and Shenzhen A-share listed companies from 2013 to 2021 as the research objective is to study the impact of digital transformation on enterprise innovation from theoretical and empirical perspectives. First, we find that digital transformation accelerates enterprise innovation, a conclusion that has been validated through robustness testing. Second, digital transformation impacts enterprise innovation by enhancing productivity and information transparency. Third, financing constraints and financial redundancy play distinct regulatory roles in the process. Fourth, heterogeneity analysis finds that the role of digital transformation in promoting enterprise innovation has different effects in state-owned and non-state-owned enterprises, high-tech and non-high-tech enterprises, and enterprises with different life cycles. Finally, the functional analysis suggests that further investigation is needed to determine whether digital transformation can significantly promote the sustainable development of enterprises through innovation while also recognizing that this function may have a lag effect. Overall, this study contributes to a deeper understanding of digital transformation and innovation-driven practices and encourages more significant integration of the real and digital economies.