The corporate value of innovation: Evidence from China

This study investigates the relationship between corporate innovation and firm value, a critical determinant of high-quality development. The significant impact of corporate innovation on corporate value warrants in-depth exploration. Drawing on a sample of A-share listed companies from 2012 to 2022, this study empirically assesses the effects of corporate innovation on both firm market valuation and book value. Crucially, it further investigates the mediating role of supply chain performance in this relationship. The findings reveal that corporate innovation not only directly boosts firm market valuation and book value but also indirectly enhances both by improving supply chain efficiency. A heterogeneity analysis indicates that this positive effect is more pronounced in state-owned enterprises (SOEs), firms operating in regions with higher technological intensity, and areas with stronger intellectual property (IP) protection. Further analysis indicates that media attention positively moderates the direct effect of corporate innovation and the first half of its mediating pathway. Specifically, exploratory innovation positively impacts both firm market valuation and book value, while exploitative innovation exhibits an inverted U-shaped relationship with both. These findings not only contribute to the literature on the mechanisms through which corporate innovation drives firm value but also provide practical insights for policymakers and managers seeking to stimulate innovation and leverage supply chain optimization to enhance corporate value.