Decision rights allocation and innovation: Evidence from China's listed business groups

Lou, Zhukun; Zhu, Mingyang

doi:10.1016/j.frl.2020.101572

Cited by 8 publications

(5 citation statements)

References 25 publications

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“…Our results suggest that parent company control of more decision-making power can facilitate group-wide CSR disclosure. This confirms previous studies that parent companies have a more comprehensive and complete view of the overall strategy and direction of the firm [37,91], and that centralized decision making in parent companies enables better corporate development decisions [49]. Furthermore, our results demonstrate the role of centralization of organizational decision making in achieving sustainable goals, supporting the centralization theory [92].…”

Section: Descriptive Statisticssupporting

confidence: 90%

“…Based on the dual disclosure system of Chinese listed companies disclosing both parent company financial statements and consolidated financial statements, see Pan et al (2018) [48]. Lou and Zhu (2021) [49] measure the centralization of decision rights using the proportion of remuneration of the parent company pays after eliminating size differences. Assuming that the payer of remuneration also enjoys the relevant personnel rights, there is a high correlation between the proportion of remuneration the parent company pays and the parent company's control over personnel rights.…”

Section: Centralization Of Decision Rightsmentioning

confidence: 99%

“…First, it has enriched the literature on CSR disclosure by corporate groups [44], where most past studies have focused on CSR disclosure by group-affiliated firms [12,45], business group CSR disclosure has only considered the influence of ownership structure as well as general governance characteristics [18,46,47], no studies have addressed the role of parent-subsidiary decision-making power structures. Second, it enriches the literature on decision rights allocation in business groups, where the current literature only focuses on the impact of decision rights allocation between parent and subsidiary on group financial performance, corporate value, and investment efficiency [48,49], which fills the gap in CSR research on organizational decision-making structures. It also helps to highlight the critical role of decision rights centralization in suppressing subsidiary rent-seeking and enabling members to achieve consistent sustainability goals.…”

Section: Introductionmentioning

confidence: 99%

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Allocation of Decision Rights and CSR Disclosure: Evidence from Listed Business Groups in China

2022

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Corporate social responsibility (CSR) research has recently begun to focus on the CSR performance of business groups, with the scope shifting from group members to business groups in general. This paper focuses on whether business groups with centralized decision rights tend to disclose more CSR information and investigates the heterogeneous effect of the number of subsidiaries. Using a dataset for listed groups in China from 2010 to 2020, our empirical test discovered that centralized decision rights could promote group CSR disclosure. For groups with many subsidiaries, centralization makes a more significant contribution to promoting CSR disclosure. The mechanism test revealed that this positive relationship between centralization and disclosure relies on efficient internal capital market allocation, a reduction in rent-seeking behavior of subsidiaries, and reputational concerns. Furthermore, we observed that the centralized decision rights influence on disclosure varies across different aspects of CSR, with a negative impact on “Social Contribution” and a positive impact on “Shareholder Responsibility”, “Employee Responsibility”, “Supplier, Customer, and Consumer Responsibility” and “Environmental Responsibility”. Centralized decision rights promote more CSR disclosures with voluntary disclosures, while regulatory disclosures have no significant effect. We research the allocation of decision rights and group CSR disclosure.

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Section: Descriptive Statisticssupporting

confidence: 90%

Section: Centralization Of Decision Rightsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Allocation of Decision Rights and CSR Disclosure: Evidence from Listed Business Groups in China

2022

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“…Many scholars believe that patent‐based indicators are an effective way to measure corporate innovation (Cornaggia et al, 2015; Fang et al, 2014; He & Tian, 2013; Lou & Zhu, 2021). Some suggest that the length of the patent assessment procedure is protracted, thus the number of granted patents reflects previous but not current innovation (Ding et al, 2022; Kong et al, 2022).…”

Section: Research Design: Data Variables and Econometric Modelmentioning

confidence: 99%

Managerial inclusiveness and corporate innovation in China

Deng,

2023

Accounting & Finance

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This study explores how managerial inclusiveness affects corporate innovation. Using an annual dataset of A‐share Chinese listed companies from 2008 to 2021, we find that managerial inclusiveness is positively related to corporate innovation. Market competition and team heterogeneity positively moderate the relationship between managerial inclusiveness and innovation. In addition, managerial inclusiveness in state‐owned enterprises plays a more significant role in promoting corporate innovation than it does in non‐state‐owned enterprises. By investigating the mechanism of influence, we found that inclusive managers can promote corporate innovation by relaxing internal controls and increasing corporate risk‐taking.

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“…The state-owned enterprises have sufficient human resource reserves, capital, and scientific research strength. They can play the business environment's driving role in enterprises' innovation ability [77]. The grouping test of property rights provides evidence for enterprise reform.…”

Section: Group Inspection Of Property Heterogeneitymentioning

confidence: 99%

Does the Improvement of the Business Environment Improve the Innovation Efficiency of Enterprises? Evidence from the Listed Companies in China

2023

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The quality of the business environment influences the speed and quality of economic development, and optimizing the business environment helps improve enterprises’ innovation ability. This article selects urban business environment and micro-enterprise data of Chinese listed companies from 2013 to 2019. It constructs a comprehensive evaluation index system for the urban business environment in China through the entropy method, exploring the specific path of promoting enterprise innovation ability through the business environment. The empirical results indicate that optimizing the business environment can encourage improving innovation efficiency in enterprises. A good business environment can increase government subsidies and enterprises’ Assumption of risk ability to promote technological innovation. Financing constraints and supply chain concentration can negatively enhance the driving effect of the business environment on enterprise innovation. Heterogeneity analysis indicates that the business environment is more conducive to stimulating the drive for technological innovation among state-owned enterprises, large-scale enterprises, and manufacturing enterprises. This article provides new insights into the relationship between the business environment and the innovation efficiency of enterprises.

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Decision rights allocation and innovation: Evidence from China's listed business groups

Cited by 8 publications

References 25 publications

Allocation of Decision Rights and CSR Disclosure: Evidence from Listed Business Groups in China

Allocation of Decision Rights and CSR Disclosure: Evidence from Listed Business Groups in China

Managerial inclusiveness and corporate innovation in China

Does the Improvement of the Business Environment Improve the Innovation Efficiency of Enterprises? Evidence from the Listed Companies in China

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