IDEAS home Printed from https://ideas.repec.org/a/taf/eurjfi/v24y2018i9p683-713.html
   My bibliography  Save this article

Stock liquidity and enterprise innovation: new evidence from China

Author

Listed:
  • Jun Wen
  • Gen-Fu Feng
  • Chun-Ping Chang
  • Zhao-Zhen Feng

Abstract

We employ data of 6194 firm-year observations for 1058 listed companies in the period 2006–2013 to investigate the interaction between stock liquidity and enterprise innovation in China and confirm that an increase in stock liquidity raises the number of patents granted, R&D investment, and the innovation efficiency of state-owned enterprises, while it decreases innovation significantly in private firms. These findings are also supported by quasi-natural experiments under the split-share structure policy reform and the adjustment of the stamp duty rate using propensity score matching and difference-in-difference methods. We then identify two possible mechanisms through which liquidity increases innovation: the entry of long-term and strategic institutional investors and the gradual privatization of SOEs. Several policy implications are provided in accordance with our findings.

Suggested Citation

  • Jun Wen & Gen-Fu Feng & Chun-Ping Chang & Zhao-Zhen Feng, 2018. "Stock liquidity and enterprise innovation: new evidence from China," The European Journal of Finance, Taylor & Francis Journals, vol. 24(9), pages 683-713, June.
    • Handle: RePEc:taf:eurjfi:v:24:y:2018:i:9:p:683-713
    DOI: 10.1080/1351847X.2017.1347573
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/1351847X.2017.1347573
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/1351847X.2017.1347573?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 search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wang, Jialong & Zhang, Jian & Huang, Haoyue & Zhang, Fan, 2020. "Directors’ and officers’ liability insurance and firm innovation," Economic Modelling, Elsevier, vol. 89(C), pages 414-426.
    2. Wen, Jun & Zhao, Xin-Xin & Fu, Qiang & Chang, Chun-Ping, 2023. "The impact of extreme weather events on green innovation: Which ones bring to the most harm?," Technological Forecasting and Social Change, Elsevier, vol. 188(C).
    3. Sylvia Novillo-Villegas & Ricardo Ayala-Andrade & Juan Pablo Lopez-Cox & Javier Salazar-Oyaneder & Patricia Acosta-Vargas, 2022. "A Roadmap for Innovation Capacity in Developing Countries," Sustainability, MDPI, vol. 14(11), pages 1-20, May.
    4. Wen, Jun & Deng, Peidong & Fu, Qiang & Chang, Chun-Ping, 2022. "Does health innovation relieve disease burden? The comprehensive evidence," Technological Forecasting and Social Change, Elsevier, vol. 174(C).
    5. Wei, Wei & Zhang, Wan-Li & Wen, Jun & Wang, Jun-Sheng, 2020. "TFP growth in Chinese cities: The role of factor-intensity and industrial agglomeration," Economic Modelling, Elsevier, vol. 91(C), pages 534-549.
    6. Shuangyan Li & Anum Shahzadi & Mingbo Zheng & Chun-Ping Chang, 2022. "The impacts of executives’ political connections on interactions between firm’s mergers, acquisitions, and performance," Economic Change and Restructuring, Springer, vol. 55(2), pages 653-679, May.
    7. Wen, Jun & Zhang, Sen & Chang, Chun-Ping, 2022. "Legal origins and innovation: Global evidence," Technological Forecasting and Social Change, Elsevier, vol. 174(C).
    8. Zhao, Xin-Xin & Zheng, Mingbo & Fu, Qiang, 2022. "How natural disasters affect energy innovation? The perspective of environmental sustainability," Energy Economics, Elsevier, vol. 109(C).
    9. Sylvia Novillo-Villegas & Patricia Acosta-Vargas & Christian Cruz-Boada & Mateo Garzon & Andre Marin-Dett & Wendy Anzules-Falcones, 2022. "Sustaining the Path for Innovation Capability from a Developing Country Perspective: A Conceptual Framework," Sustainability, MDPI, vol. 14(19), pages 1-26, October.
    10. Wen, Jun & Okolo, Chukwuemeka Valentine & Ugwuoke, Ifeanyi Celestine & Kolani, Kibir, 2022. "Research on influencing factors of renewable energy, energy efficiency, on technological innovation. Does trade, investment and human capital development matter?," Energy Policy, Elsevier, vol. 160(C).
    11. Feng, Gen-Fu & Zheng, Mingbo & Wen, Jun & Chang, Chun-Ping & Chen, Yin E., 2019. "The assessment of globalization on innovation in Chinese manufacturing firms," Structural Change and Economic Dynamics, Elsevier, vol. 50(C), pages 190-202.
    12. Zheng, Mingbo & Feng, Gen-Fu & Wang, Quan-Jing & Chang, Chun-Ping, 2023. "Financial globalization and technological innovation: International evidence," Economic Systems, Elsevier, vol. 47(1).

    More about this item

    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:taf:eurjfi:v:24:y:2018:i:9:p:683-713. 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/REJF20 .

    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.