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Violation Punishment and Total Factor Productivity, Based on the Spillover Effect between Director‐Interlocked Firms

Author

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  • Yang Lu
  • Xiangge Meng
  • Haitao Song

Abstract

Using the sample of A‐share listed firms in China from 2008 to 2019, we empirically test the spillover effect of violation punishment on the total factor productivity of director‐interlocked firms. We find that violation punishment can significantly aggravate the violation of director‐interlocked firms and preliminarily verify the spillover effect of violation punishment among director‐interlocked firms. We also find that violation punishment will significantly reduce the total factor productivity of director‐interlocked firms. The result is still stable after replacing the measurement method of total factor productivity, and its impact has a certain continuity, which can affect for two consecutive years. Further research shows that the R&D investment plays a mediation role between the violation punishment and the total factor productivity of the director interlocked firms. The violation punishment can reduce the R&D investment of the director‐interlocked firms and then reduce the total factor productivity of the director‐interlocked firms. In addition, after distinguishing the type of firm ownership, we find that compared with state‐owned enterprises, violation punishment has a more significant inhibitory effect on the total factor productivity of private enterprises’ director‐interlocked firms. Based on the perspective of the director network, we investigate the spillover effect of violation punishment on the total factor productivity of director‐interlocked firms, which provides a new theoretical perspective for the in‐depth understanding of the economic consequences of violation punishment, improves the total factor productivity of listed firms, and has important theoretical and practical significance.

Suggested Citation

  • Yang Lu & Xiangge Meng & Haitao Song, 2023. "Violation Punishment and Total Factor Productivity, Based on the Spillover Effect between Director‐Interlocked Firms," Mathematical Problems in Engineering, John Wiley & Sons, vol. 2023(1).
    • Handle: RePEc:wly:jnlmpe:v:2023:y:2023:i:1:n:8977265
    DOI: 10.1155/2023/8977265
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    References listed on IDEAS

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