IDEAS home Printed from https://ideas.repec.org/a/spr/joevec/v35y2025i3d10.1007_s00191-025-00906-9.html
   My bibliography  Save this article

Foreign institutional ownership and corporate innovation in emerging economies: Heterogeneity analysis of private enterprises and state-owned relative holding enterprises in China

Author

Listed:
  • Liangchun Yu

    (Shandong University, Shanda Road.(S))

  • Xinxin Wang

    (Shandong University, Shanda Road.(S))

Abstract

This paper examines the different effects of foreign institutional ownership (FIO) on innovation of private enterprises (PEs) and state-owned relative holding enterprises (SORHEs) based on listed company data during the period 2010–2022 from China. Empirical results suggest that FIO is associated with innovation output positively and significantly only for PEs, while not for SORHEs. For PEs, the positive FIO–innovation relationship appears through increased R&D input, and further is sourced from lifted risk toleration ability, lowered agency cost, and improved internal control. However, for SORHEs, FIO does not influence their R&D input and R&D efficiency, and a possible explanation is that inefficient internal control prevents innovative processes from being implemented smoothly. Additionally, there is no evidence of a non-collinearity link between FIO and innovation, then neither the innovation structure at the country level nor the innovation quality at the firm level improves with FIO. This paper is rare research related to the FIO–innovation nexus and analyzes the heterogeneity between PEs and SORHEs within a unified framework, and our research conclusions provide much important guidance for corporate innovative activities, governance, and reform.

Suggested Citation

  • Liangchun Yu & Xinxin Wang, 2025. "Foreign institutional ownership and corporate innovation in emerging economies: Heterogeneity analysis of private enterprises and state-owned relative holding enterprises in China," Journal of Evolutionary Economics, Springer, vol. 35(3), pages 441-470, July.
    • Handle: RePEc:spr:joevec:v:35:y:2025:i:3:d:10.1007_s00191-025-00906-9
    DOI: 10.1007/s00191-025-00906-9
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s00191-025-00906-9
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s00191-025-00906-9?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

    Statistics

    Access and download statistics

    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:spr:joevec:v:35:y:2025:i:3:d:10.1007_s00191-025-00906-9. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.