The Influence Of Party Organization's Participation In External Governance On The Innovation Of China's State-owned Enterprises

The governance of China's SOE(state-owned enterprise)owns distinctive characteristics,the unique institutional background has a profound impact on the development of it.Chinese Communist Party has played a leading role in the process of comprehensively deepening reforms,it is of great significance to realize the effective combination of party organization and modern governance system.Since the 18 th National Congress of the Communist Party of China(CPC),the inspection system has achieved innovative development,starting the inspection of central enterprises and becoming an important corporate governance mechanism.The paper analyzes the impact of inspection on enterprises innovation,through the multi-period difference-to-difference(DID)model.The empirical results show that the inspection promoted the innovation of central state-owned enterprise,further research found that the promotion effect of inspection on innovation was more significant in the companies with over consumption,low investment efficiency and high institutional investors shareholding.Based on the empirical results,this paper proposes that the inspection of enterprise innovation should be placed in a more prominent position,the inspection methods should be improved according to the characteristics of innovation activities,and the coordination with other supervision mechanisms should be strengthened.State-owned enterprises should promote reform by inspection,further improve the innovationoriented incentive and assessment mechanism for senior executives,optimize the structure of institutional investors,so as to promote enterprise innovation.