| This study examines the relationship between corporate governance and corporate innovation within the context of China listed firms engaging in OFDI activity.It aims to contribute to the literature on corporate innovation antecedents,corporate governance of Chinese firms,EMNCs’ OFDI activity,and the impact of firm performance on innovation outcomes.Relying on agency and resource-based theory to understand the corporate governance concepts,Tobin’ s Q as a measure of firm performance,and patents granted as a measure of successful corporate innovation,this study uses a quantitative research methodology and a longitudinal design to leverage data collected from the State Intellectual Property Office of China,the Chinese Research Data Services Platform as well as the China Stock Market&Accounting Research Database.We are able to quantify how policies in line with institutional theory affect the corporate governance of Chinese firms.The sample includes 3,337 firms with a total 13,182 firm-year observations from the year 2010 to 2019,divided into two panel datasets including 6,581 firm-year observations for China listed firms engaging in OFDI,and 6,601 firm-year observations for China listed firms not engaging in OFDI.A better understanding of Chinese corporate governance practices,and internationalization drivers in light of the country’s recent reforms or initiatives such as the "Made in China 2025" plan,is needed,especially considering the necessity to derive a corporate governance theory from China for Chinese firms.We find that board independence is the corporate governance component with the highest predictive significance on innovation,followed by board size,and that CEO duality is not a significant innovation predictor.We also find high incidence of CEO duality,although less frequent for firms engaging in OFDI,and that China listed firms that engage in OFDI activity are more innovative than firms that don’t engage in OFDI. |
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