Does institutional fragility affect innovation investment?
ISSN: 1750-614X
Article publication date: 9 August 2021
Issue publication date: 13 May 2022
Abstract
Purpose
This study aims to investigate the impact of institutional fragility on the innovation investments of enterprises by analyzing the moderating effect of government subsidies and the integration of industry and finance.
Design/methodology/approach
Multiple regression analysis was used on 10,838 samples of 2,356 listed companies in China for the period 2007–2017, to empirically test the influence of institutional fragility on innovation investment. Moreover, Heckman’s two-stage approach was used for the robustness of the regression results.
Findings
The results show that the relationship between institutional fragility and innovation investment is an inverted U-shaped; government subsidies negatively moderate the relationship between institutional fragility and innovation investment, while the integration of industry and finance positively moderates them. Further analysis shows that the relationship between institutional fragility and innovation investment is more significant for high-tech enterprises. Similarly, the relationship between institutional fragility and innovation output also presents an inverted U-shape, which mainly affects enterprises’ breakthrough innovation output, but has no substantial impact on the incremental innovation output.
Originality/value
The conclusions provide new ideas for guiding the government’s reform, promoting the integration of industry and finance and promoting enterprise innovation.
Keywords
Acknowledgements
The authors gratefully acknowledge insightful suggestions from the editors and review team, which substantively improved the earlier version of this manuscript. The authors acknowledge financial support from the Humanity and Social Science Foundation of the Ministry of Education of China (18YJC790067), Liaoning Provincial Department of education Youth Science and technology talent “seedling” project (LN2019Q65) and Soft science project of Henan science and Technology Department “Research on risk governance effect of corporate social responsibility”(212400410548); Xinli Li is the corresponding author, e-mail: lixinli4505165@163.com. All coauthors have made equal contributions to the paper.
Citation
Li, X., Cheng, J., Wan, S. and Zhao, Z. (2022), "Does institutional fragility affect innovation investment?", Chinese Management Studies, Vol. 16 No. 3, pp. 589-608. https://doi.org/10.1108/CMS-10-2020-0436
Publisher
:Emerald Publishing Limited
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