Firms' innovation strategy under the shadow of corporate social responsibility disclosure: Evidence from China
About: This article is published in Managerial and Decision Economics.The article was published on 2021-06-13. It has received 5 citations till now. The article focuses on the topics: Shadow (psychology) & Corporate social responsibility.
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01 Jan 2017
TL;DR: In this paper, a positive association between integrated report quality (IRQ) and firm value was found by examining two channels through which this association may arise, a capital market channel and a real effects channel.
Abstract: The International Integrated Reporting Council's Framework identifies two goals for integrated reporting: improved information for outside providers of financial capital and better internal decision making. We extend prior research that finds a positive association between integrated report quality (IRQ) and firm value by examining two channels through which this association may arise--a capital market channel and a real effects channel. To conduct these tests, we disaggregate firm value into three components: liquidity, cost of capital, and expected future cash flows. Using data from South Africa where integrated reporting is mandatory and an IRQ measure based on proprietary EY data, we find a positive association between IRQ and liquidity, which supports the capital market channel. We find no evidence of a relation between IRQ and cost of capital. We also find a positive association between IRQ and expected future cash flows. Because this association could reflect better investor cash flow forecasts--a capital market effect, better internal decisions--a real effect, or both, we attempt to distinguish these explanations. We find higher IRQ is (not) associated with higher realized future operating cash flows (greater analyst target price forecast accuracy), and is associated with less over- and under-investment. These findings support the real effects channel. Together, our findings are consistent with integrated reporting achieving its dual objective of improved external information and better internal decisions.
99 citations
TL;DR: In this paper, the authors analyzed the real effects of the environmental regulation on technological innovation using an air pollution reduction governance policy promulgated in China under the 12th Plan in 2012 and found that environmental regulation substantially promotes innovation productivity.
Abstract: We analyze the real effects of the environmental regulation on technological innovation using an air pollution reduction governance policy promulgated in China under the 12th Plan in 2012. We treat the Air Pollution Prevention Policy as a quasi-natural experiment that is plausibly exogenous to the firms’ innovation policy and thus use the difference in difference (DID) as an identification strategy in our analysis. We provide evidence that environmental regulation substantially promotes innovation productivity. Our findings reveal that this impact is more pronounced for state-owned firms, pollution-intensive industries, and high-tech-intensive industries. We uncover three possible underlying economic mechanisms through which the air pollution reduction policy impacts innovation. We show that government financing, external governance from the capital market, and R&D intensity are three underlying economic channels through which environmental regulation promotes technological innovation. Collectively this study’s policy implication is that industrial policies that promote greener environments can enhance economic performance.
30 citations
TL;DR: In this paper , the authors investigated the impact of fintech development on corporate green technology innovation and its mechanisms, and found that the promotion effect of Fintech works through three channels: alleviating financing constraints, gathering scientific and technological talents, and optimizing environmental regulations.
Abstract: This paper uses the number of green patents granted of listed companies and the number of fintech companies in prefecture-level cities in China from 2011 to 2018 to investigate the impact of fintech development on corporate green technology innovation and its mechanisms. We find that fintech can significantly promote corporate green technology innovation. Specifically, the promotion effect of fintech works through three channels: alleviating financing constraints, gathering scientific and technological talents, and optimizing environmental regulations. Heterogeneity tests find that its promotion effect is more significant for the eastern region, invention patents, state-owned enterprises, and low environmental uncertainty.
10 citations
TL;DR: Li et al. as discussed by the authors investigated the effect of corporate environmental information disclosure (EID) on green innovation in China's heavily polluting industries during 2009-2020 and the moderating effect of Chief Executive Officer (CEO) visibility.
Abstract: This study investigates the effect of corporate environmental information disclosure (EID) on green innovation in China's heavily polluting industries during 2009–2020 and the moderating effect of Chief Executive Officer (CEO) visibility. The results show that: (1) corporate EID increases green innovation, and CEO visibility strengthens the positive impact of corporate EID on green innovation. (2) The green innovation fostered by EID comes from the leverage effect, not from the crowding-out effect at the expense of other existing innovations; EID stimulates green innovation by alleviating financing constraints and increasing R&D expenditures. (3) Corporate EID has a greater impact on substantive green innovation than on strategic green innovation, and hard EID makes a more significant contribution to green innovation than soft EID does. (4) State-owned, large, and established enterprises benefit more from the promotion effect of EID on green innovation as well as the positive moderating effect of CEO visibility.
1 citations
TL;DR: In this article , an evolutionary game model was constructed by introducing a supervisory mechanism and conducts simulations to study patent strategy of enterprises participating in the standard setting, and empirical is used to test opportunistic motive.
Abstract: The patent entry standard raises the technical level, but it also sparked discussion on patent strategic. This paper constructs an evolutionary game model by introducing a supervisory mechanism and conducts simulations to study patent strategy of enterprises participating in standard setting. Moreover, empirical is used to test opportunistic motive. This paper finds that pre-regulation and post-punishment have key effect on the equilibrium. With the strengthening of supervision, the system tends to converge on the results of prior disclosure. Companies participating in national standard setting have opportunistic motive to patent applications. The paper enriches the research of intellectual property in standardisation.
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TL;DR: In this paper, a firm that must issue common stock to raise cash to undertake a valuable investment opportunity is considered, and an equilibrium model of the issue-invest decision is developed under these assumptions.
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TL;DR: In this article, the authors test whether firms that would benefit from import relief attempt to decrease earnings through earnings management during import relief investigations by the United States International Trade Commission (ITC).
Abstract: This study tests whether firms that would benefit from import relief (eg, tariff increases and quota reductions) attempt to decrease earnings through earnings management during import relief investigations by the United States International Trade Commission (ITC) The import relief determination made by the ITC is based on several factors that are specified in the federal trade acts, including the profitability of the industry Explicit use of accounting numbers in import relief regulation provides incentives for managers to manage earnings in order to increase the likelihood of obtaining import relief and/or increase the amount of relief granted While studies of earnings management typically examine situations in which all contracting parties have incentives to "perfectly" monitor (adjust) accounting numbers for such manipulation, import relief investigations provide a specific motive for earnings management that is not
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TL;DR: In this article, the authors examine the specification and power of tests based on performance-matched discretionary accruals, and make comparisons with tests using traditional discretionary accumrual measures (e.g., Jones and modified-Jones models).
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TL;DR: The authors examine how firms search, or solve problems, to create new products and find that firms position themselves in a unidimensional search space that spans a spectrum from local to distant search.
Abstract: We examine how firms search, or solve problems, to create new products. According to organizational learning research, firms position themselves in a unidimensional search space that spans a spectrum from local to distant search. Our findings in the global robotics industry suggest that firms' search efforts actually vary across two distinct dimensions: search depth, or how frequently the firm reuses its existing knowledge, and search scope, or how widely the firm explores new knowledge.
3,110 citations
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TL;DR: Hall et al. as mentioned in this paper explored the usefulness of patent citations as a measure of the "importance" of a firm's patents, as indicated by the stock market valuation of the firm's intangible stock of knowledge.
Abstract: Author(s): Hall, Bronwyn H.; Jaffe, A; Trajtenberg, M | Abstract: We explore the usefulness of patent citations as a measure of the "importance" of a firm's patents, as indicated by the stock market valuation of the firm's intangible stock of knowledge. Using patents and citations for 1963-1995, we estimate Tobin's q equations on the ratios of RaD to assets stocks, patents to RaD, and citations to patents. We find that each ratio significantly affects market value, with an extra citation per patent boosting market value by 3%. Further findings indicate that "unpredictable" citations have a stronger effect than the predictable portion, and that self-citations are more valuable than external citations.
2,989 citations