External Environment, Pyramid Structure And Technical Innovation

Under the influence of economic globalization, the importance of technology development gradually emerges. As a powerful promoter of technological innovation, the company’s innovative technology can not only bring the sustainable competitiveness and high profits, some time it can even change the way of life. Nowadays, in the period of rapid development of technology innovation, from made in China to created in China, private enterprise’s performance becomes more and more important. Therefore, an in-depth understanding of the impact of internal ownership structure and external environment of private enterprises on technical innovation, exploring the root of effects will have a very important practical significance.The existing research often analyzes from the angle of R&D investment, but ignores the technical output and the efficiency of input-output. The internal and external environment of companies has an extensive effect on technological innovation, in the background of increasingly perfect institutional environment and the widespread pyramidal structure, it’s really necessary to investigate the influence of these two on corporate technical innovation. Based on three angle of input, output and efficiency to measure innovation, by applying SFA method to calculate technical efficiency and hand-collecting prymidal structure data, this paper use 296 private-owned manufacturing industry listed companies in China from 2004 to 2013 to study relationship of technical innovation with external environment and pyramid structure. The results show that a better institutional environment will promote corporate technical innovation, product market competition has a significant positive correlation with technical innovation, the relationship between the level and complexity of the pyramid structure, separation of two rights and the technical innovation is significantly negative correlation. Furthermore, after grouping the product market competition and erternal institutional environment, we find that the negative effect of the pyramidal structure variables on technical innovation decreases in the better external environment and in the higher PMC, which indicates that the higher PMC and the better institutional environment can effectively help the firm to handle the contradiction, improve corporate governance, reduce agency cost, then alleviate inhibition action of pyramidal structure on technical innovation.