This paper examines the effects of ownership types on firms' R&D intensity and innovation performance, using a sample of 357,857 Chinese firms from 2005 to 2007. This study finds considerable divergence among Chinese domestic enterprises in terms of R&D intensity and innovation performance. We find that firms owned by the central government are the key drivers for firms' R&D activities, while local government, private and foreign ownerships are negatively related to both R&D intensity and innovation performance. This paper finds significant divergence within government ownership category and argues that China's institutional changes generate varied government ownership groups with different levels of resource endowment, which in turn influence firms' R&D activities.
Purpose: A recent study by Jon Aarun Andersen argued that corporate governance research will improve if it abandons the concept of managerial discretion due to the lack of an empirical definition and measurement of the concept. In this paper, we comment on Andersen (2017) by suggesting that the theoretical reasoning employed in his work is not adequate and that the concept of managerial discretion is one of the core dimensions that should be studied when researching corporate governance.Design/methodology/approach: This paper uses theoretical frameworks from recent literature, definitions and empirical studies on the concept of managerial discretion and corporate governance.Findings: Several studies have empirical tested and measured the concept of managerial discretion and that other attempts have provided validity and reliability of the concept, other have showed the direct impact of discretion on firm performance.
Practical implications:Research on managerial discretion provides owners and board of directors a clear advice on how much discretion can be granted to top executives by taking into consideration the different dimensions of the external and internal environment.Originality/value: This paper concludes that corporate governance research will not improve if it abandons the concept of managerial discretion.
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