Does intergenerational mobility affect corporate innovation? Evidence from Chinese manufacturing enterprises

Integrating efficiency with dynamic fairness is crucial for advancing economic development. This study aims to enhance the analytical framework guiding firm behavior by introducing intergenerational mobility. Using data from Chinese listed enterprises, we empirically investigate the impact of intergenerational mobility on corporate innovation levels. The results show that higher regional intergenerational mobility promotes both quantity and quality of corporate innovation. Compensation incentive, Human capital allocation and social trust are identified as transmission mechanisms. Furthermore, the positive effect of high intergenerational mobility on innovation output is more pronounced in local private enterprises than in state-owned ones. Additionally, our study reveals that formal institutions have substitutive relationship with intergenerational mobility in affecting corporate innovation. These findings contribute to a nuanced theoretical understanding of opportunity equality at the micro-level and provide empirical evidence supporting China’s sustainable economic development.