IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v13y2021i3p1023-d483526.html
   My bibliography  Save this article

The Impact of Corporate Strategy on Enterprise Innovation Based on the Mediating Effect of Corporate Risk-Taking

Author

Listed:
  • Rui Li

    () (School of Economics and Management, Beijing Jiaotong University, Beijng 100044, China)

  • Yongmei Cui

    () (School of Economics and Management, Beijing Jiaotong University, Beijng 100044, China)

  • Yajun Zheng

    () (School of Economics and Management, Beijing Jiaotong University, Beijng 100044, China
    School of Economics and Management, East China Jiaotong University, Nanchang 330013, China)

Abstract

Corporate strategy and enterprise innovation are highly relevant to corporate sustainability. Although previous studies on corporate strategy and enterprise innovation have yielded many results, a consensus regarding the relationship between the two is still lacking. The purpose of this study was to empirically analyze the impact of corporate strategy on corporate innovation performance and analyze corporate risk-taking as a potential factor mediating such. Based on data for listed Chinese A-share manufacturing companies for 2008 to 2018, this empirical study found that corporate strategy and corporate innovation show an inverted U-shaped relationship. Corporate risk-taking plays a mediating effect between corporate strategy and corporate innovation performance. This study expands the knowledge on situational variables and the mechanism by which corporate strategy might impact enterprise innovation and can enlighten managers to promote the sustainable development of manufacturing enterprises.

Suggested Citation

  • Rui Li & Yongmei Cui & Yajun Zheng, 2021. "The Impact of Corporate Strategy on Enterprise Innovation Based on the Mediating Effect of Corporate Risk-Taking," Sustainability, MDPI, Open Access Journal, vol. 13(3), pages 1-17, January.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:3:p:1023-:d:483526
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/13/3/1023/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/13/3/1023/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. García-Granero, Ana & Llopis, Óscar & Fernández-Mesa, Anabel & Alegre, Joaquín, 2015. "Unraveling the link between managerial risk-taking and innovation: The mediating role of a risk-taking climate," Journal of Business Research, Elsevier, vol. 68(5), pages 1094-1104.
    2. Kathleen A. Bentley & Thomas C. Omer & Nathan Y. Sharp, 2013. "Business Strategy, Financial Reporting Irregularities, and Audit Effort," Contemporary Accounting Research, John Wiley & Sons, vol. 30(2), pages 780-817, June.
    3. Prajogo, Daniel I. & Sohal, Amrik S., 2006. "The relationship between organization strategy, total quality management (TQM), and organization performance--the mediating role of TQM," European Journal of Operational Research, Elsevier, vol. 168(1), pages 35-50, January.
    4. Mara Faccio & Maria-Teresa Marchica & Roberto Mura, 2011. "Large Shareholder Diversification and Corporate Risk-Taking," Review of Financial Studies, Society for Financial Studies, vol. 24(11), pages 3601-3641.
    5. Wendy K. Smith & Michael L. Tushman, 2005. "Managing Strategic Contradictions: A Top Management Model for Managing Innovation Streams," Organization Science, INFORMS, vol. 16(5), pages 522-536, October.
    6. Jens Fr¯slev Christensen, 2002. "Corporate strategy and the management of innovation and technology," Industrial and Corporate Change, Oxford University Press, vol. 11(2), pages 263-288.
    7. Lau, Chung-Ming, 2011. "Team and organizational resources, strategic orientations, and firm performance in a transitional economy," Journal of Business Research, Elsevier, vol. 64(12), pages 1344-1351.
    8. Torugsa, Nuttaneeya (Ann) & Arundel, Anthony, 2017. "Rethinking the effect of risk aversion on the benefits of service innovations in public administration agencies," Research Policy, Elsevier, vol. 46(5), pages 900-910.
    9. Faccio, Mara & Marchica, Maria-Teresa & Mura, Roberto, 2016. "CEO gender, corporate risk-taking, and the efficiency of capital allocation," Journal of Corporate Finance, Elsevier, vol. 39(C), pages 193-209.
    10. Pang, Caiji & Wang, Ying, 2020. "Stock pledge, risk of losing control and corporate innovation," Journal of Corporate Finance, Elsevier, vol. 60(C).
    11. Dziallas, Marisa & Blind, Knut, 2019. "Innovation indicators throughout the innovation process: An extensive literature analysis," Technovation, Elsevier, vol. 80, pages 3-29.
    12. Shahzad, Farrukh & Lu, Jing & Fareed, Zeeshan, 2019. "Does firm life cycle impact corporate risk taking and performance?," Journal of Multinational Financial Management, Elsevier, vol. 51(C), pages 23-44.
    13. Imhof, Michael J. & Seavey, Scott E., 2014. "Corporate risk-taking, firm value and high levels of managerial earnings forecasts," Advances in accounting, Elsevier, vol. 30(2), pages 328-337.
    14. Ming‐Jer Chen & Danny Miller, 1994. "Competitive attack, retaliation and performance: An expectancy‐valence framework," Strategic Management Journal, Wiley Blackwell, vol. 15(2), pages 85-102, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wang, Qiong & Qiu, Muqing & Tan, Wenhao, 2020. "Does insiders share pledging stifle innovation? Evidence from China," International Review of Financial Analysis, Elsevier, vol. 72(C).
    2. Maria Giuseppina Bruna & Rey Dang & Marie-José Scotto & Aymen Ammari, 2019. "Does board gender diversity affect firm risk-taking? Evidence from the French stock market," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 23(4), pages 915-938, December.
    3. Zhong, Ma, 2014. "认知的桎梏：从稳定型财务业绩到企业过度投资 ——基于中国上市公司的证据 [Cognitive shackles: from Consistency of financial performance to Corporate Over-investment ——Evidence-based China Listed Companies]," MPRA Paper 55476, University Library of Munich, Germany.
    4. Kebin Deng & Zhong Ding & Yalu Wang, 2020. "Peasant youth experiences of CEOs, risk aversion and corporate performance," Rationality and Society, , vol. 32(3), pages 278-312, August.
    5. Adachi-Sato, Meg & Vithessonthi, Chaiporn, 2019. "Corporate debt maturity and future firm performance volatility," International Review of Economics & Finance, Elsevier, vol. 60(C), pages 216-237.
    6. Henrique Castro Martins, 2020. "The Brazilian bankruptcy law reform, corporate ownership concentration, and risk‐taking," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(4), pages 562-573, June.
    7. Koirala, Santosh & Marshall, Andrew & Neupane, Suman & Thapa, Chandra, 2020. "Corporate governance reform and risk-taking: Evidence from a quasi-natural experiment in an emerging market," Journal of Corporate Finance, Elsevier, vol. 61(C).
    8. Sultan Sikandar Mirza & Raheel Safdar & Yan Yu & M. Awais Gulzar, 2019. "Managerial Empowerment and Firm Risk-Taking," SAGE Open, , vol. 9(2), pages 21582440198, June.
    9. Kun Su & Rui Wan & Victor Y. Song, 2018. "Pyramidal structure, risk‐taking and firm value: Evidence from Chinese local SOEs," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 26(3), pages 401-427, July.
    10. Panta, Humnath, 2020. "Does social capital influence corporate risk-taking?," Journal of Behavioral and Experimental Finance, Elsevier, vol. 26(C).
    11. Vo, Xuan Vinh, 2018. "Do firms with state ownership in transitional economies take more risk? Evidence from Vietnam," Research in International Business and Finance, Elsevier, vol. 46(C), pages 251-256.
    12. Owen, Ann L. & Temesvary, Judit, 2018. "The performance effects of gender diversity on bank boards," Journal of Banking & Finance, Elsevier, vol. 90(C), pages 50-63.
    13. Nils Grashof, 2020. "Sinking or swimming in the cluster labour pool? A firm-specific analysis of the effect of specialized labour," Jena Economic Research Papers 2020-006, Friedrich-Schiller-University Jena.
    14. Kirsti Iivonen, 2018. "Defensive Responses to Strategic Sustainability Paradoxes: Have Your Coke and Drink It Too!," Journal of Business Ethics, Springer, vol. 148(2), pages 309-327, March.
    15. Yusuf, Fatima & Yousaf, Amna & Saeed, Abubakr, 2018. "Rethinking agency theory in developing countries: A case study of Pakistan," Accounting forum, Elsevier, vol. 42(4), pages 281-292.
    16. Peterson K. Ozili, 2020. "Does competence of central bank governors influence financial stability?," Future Business Journal, Springer, vol. 6(1), pages 1-20, December.
    17. Charles H. Cho & Jonathan Maurice & Emmanuelle Nègre & Marie-Anne Verdier, 2016. "Is environmental disclosure good for the environment? A meta-analysis and research agenda," Post-Print halshs-01369422, HAL.
    18. Jan Ossenbrink & Joern Hoppmann & Volker H. Hoffmann, 2019. "Hybrid Ambidexterity: How the Environment Shapes Incumbents’ Use of Structural and Contextual Approaches," Organization Science, INFORMS, vol. 30(6), pages 1319-1348, November.
    19. Jiang, Tianjiao & Levine, Ross & Lin, Chen & Wei, Lai, 2020. "Bank deregulation and corporate risk," Journal of Corporate Finance, Elsevier, vol. 60(C).
    20. Frank T. Rothaermel & Maria Tereza Alexandre, 2009. "Ambidexterity in Technology Sourcing: The Moderating Role of Absorptive Capacity," Organization Science, INFORMS, vol. 20(4), pages 759-780, August.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:13:y:2021:i:3:p:1023-:d:483526. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (XML Conversion Team). General contact details of provider: https://www.mdpi.com/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.