The Impact of Firm Ownership on Innovation: Evidence From China
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This thesis uses data from the Shanghai Stock Exchange from 2013 to 2019 to focus on the impact of five ownership structures on firm innovation. In this context, innovation refers to firm performance innovation, specialisation innovation and diversification innovation. The results show that concentrated ownership is positively related to firm innovation performance, while foreign ownership is negatively related to firm innovation performance. However, there is no significant linear relationship between firm ownership and innovation performance. Nevertheless, the innovation performance of concentrated ownership does not differ significantly between the different levels when a threshold is used. Insider ownership positively impacts innovation performance when insider ownership is below 5% or above 20%. Particularly, insider ownership above 20% has a higher impact on innovation performance than insider ownership below 5%. State ownership is positively associated with innovation performance only when less than 5%. Moreover, the results find that only firms with more than 20% foreign ownership impaired innovation performance. There are no significant differences between different levels of institutional ownership in terms of firm innovation performance. Finally, the findings suggest that firm ownership is not related to innovation specialisation or diversification.