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Can employee directors promote corporate innovation: From the perspective of employee rights protection

Author

Listed:
  • Xu, Jian
  • Duan, Mengru

Abstract

Using data from China’s A-share listed companies from 2009 to 2022, this study investigates the relationship between employee directors and corporate innovation, while examining the mediating role of employee rights protection in this relationship. The findings reveal that employee directors enhance corporate innovation through improved employee rights protection. Further analyses demonstrate stronger positive effects of employee directors on innovation in state-owned enterprises, firms facing higher product market competition intensity and non-high-tech industries. These findings uncover the mechanisms through which employee directors influence corporate innovation, while providing a novel perspective on employee participation in corporate governance.

Suggested Citation

  • Xu, Jian & Duan, Mengru, 2026. "Can employee directors promote corporate innovation: From the perspective of employee rights protection," Finance Research Letters, Elsevier, vol. 87(C).
    • Handle: RePEc:eee:finlet:v:87:y:2026:i:c:s1544612325023566
    DOI: 10.1016/j.frl.2025.109107
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    Keywords

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    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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