Cross-Firm Technological Linkages and Peer Effects on Corporate Governance

This study extends the literature on peer effects by revealing that technological linkages drive cross-firm emulation of corporate governance practices, a core determinant of firms’ sustainable development capacity. Using a comprehensive sample of China’s A-share listed firms over the period 2004–2022, we document that R&D-intensive firms strategically extract governance insights from their technological peers. Our empirical analyses identify three distinct mechanisms underlying this governance emulation: information bridging, competitive isomorphism, and market feedback. Furthermore, this peer effect exhibits significant heterogeneity across firms with different corporate performance, R&D investment levels, and resource intensity. Notably, firms adopting peer-based governance practices experience a substantial improvement in financial performance, which reflects rational adaptation rather than blind herd behavior. Overall, this paper introduces technological peer relationship as a novel determinant of governance decisions and provides a micro-foundation for how firms optimize their governance arrangements to enhance long-term sustainable operation within technologically interdependent markets.