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Ownership structure and R&D: The role of regional governance environment

Author

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  • Wan, Wei
  • Zhou, Fanqi
  • Liu, Lingjie
  • Fang, Libing
  • Chen, Xudong

Abstract

The Regional Governance Environment (RGE) is the key issue along with the rapidly industrial upgrading in China. We seek to investigate the moderating effect of the RGE on the relationship of firms’ ownership structure and R&D based on the Chinese listed firms during 2007–2018. The results show that the ownership concentration has a negative effect on R&D intensity, which is restricted by the improvement of RGE. Meanwhile, the ownership restriction has a positive effect, which is significantly strengthened by the improvement of RGE. The conclusion is valid through a series of robust tests. Our study contributes to the relationship between firms’ ownership structure and R&D investment from the perspective of external governance, such as RGE. Some implication is also presented for industrial upgrading policy based on firms’ R&D investment.

Suggested Citation

  • Wan, Wei & Zhou, Fanqi & Liu, Lingjie & Fang, Libing & Chen, Xudong, 2021. "Ownership structure and R&D: The role of regional governance environment," International Review of Economics & Finance, Elsevier, vol. 72(C), pages 45-58.
    • Handle: RePEc:eee:reveco:v:72:y:2021:i:c:p:45-58
    DOI: 10.1016/j.iref.2020.11.002
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