Pu, Tingqian; Zulka li, Abdul Hadi
A icle
Manage ial owne ship and co po a e inno a ion: e idence
o pa en ing ac i i y om Chinese lis ed manu ac u ing
i ms
Cogen Business & Managemen
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Manage ial owne ship and co po a e inno a ion:
e idence o pa en ing ac i i y om Chinese lis ed
manu ac u ing fi ms
Tingqian Pu & Abdul Hadi Zulkafli
To ci e his a icle: Tingqian Pu & Abdul Hadi Zulkafli (2024) Manage ial owne ship and
co po a e inno a ion: e idence o pa en ing ac i i y om Chinese lis ed manu ac u ing fi ms,
Cogen Business & Managemen , 11:1, 2289202, DOI: 10.1080/23311975.2023.2289202
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ACCOUNTING, CORPORATE GOVERNANCE &
BUSINESS ETHICS | RESEARCH ARTIClE
Cogen Business & ManageMen
2024, VoL. 11, no. 1, 2289202
Manage ial owne ship and co po a e inno a ion: e idence o
pa en ing ac i i y om Chinese lis ed manu ac u ing i ms
Tingqian Pu and Abdul Hadi Zulka li
Finance sec ion, school o Managemen , uni e si i sains Malaysia, Penang, Malaysia
ABSTRACT
Co po a e inno a ion plays a c ucial ole in main aining compe i i eness and enhancing
i m alue. Howe e , despi e being he wo ld’s leading manu ac u ing na ion, he ole
o manage ial owne ship in os e ing inno a ion wi hin he Chinese manu ac u ing
indus y has no ecei ed adequa e a en ion. The e o e, his esea ch in es iga es he
in luence o manage ial owne ship on co po a e inno a ion using da a on pa en
ac i i ies om Chinese lis ed manu ac u ing i ms co e ing he pe iod om 2008 o
2021. D awing on agency heo y, empi ical e idence con i ms a posi i e ela ionship
be ween manage ial owne ship and co po a e inno a ion. This esul emains obus
ac oss a ious es s, including he use o al e na i e dependen a iables, he applica ion
o wo-s age Da a En elopmen Analysis (DEA) o con ol o manage ial abili y,
co ec ion o selec ion bias using Heckman wo-s age es ima ion, and he u iliza ion o
Gene alized Me hod o Momen s (GMM) es ima o s. Addi ionally, he s udy cla i ies he
inpu channel and e iciency channel h ough whic-h manage ial owne ship posi i ely
in luences co po a e inno a ion. This pape con ibu es o he li e a u e on co po a e
inno a ion by o e ing e idence o he ole o manage ial owne ship on he inno a ion
ou pu . I also o e s aluable go e nance insigh s o policymake s in eme ging
economies who a e explo ing co po a e go e nance mechanisms o inno a ion
sys ems, aiming o acili a e a sys emic shi owa d an inno a i e manu ac u ing
economy.
IMPACT STATEMENT
Unlike mos p io s udies on co po a e inno a ion, his esea ch ocuses on he
manu ac u ing sec o in China, in es iga ing he impac o manage ial owne ship on
inno a ion om he pe spec i e o pa en ac i i ies. I is no ewo hy ha his s udy
employs he Da a En elopmen Analysis (DEA) con olling o manage ial abili y, Heckman
wo-s age es ima ion co ec ing o selec ion bias, and he use o a dynamic panel GMM
es ima o o con ol o omi ed a iables and endogenei y o e e se ela ionships—
ac o s a ely conside ed in p e ious esea ch. Addi ionally, his pape elucida es h ee
aspec s h ough which manage ial owne ship os e s inno a ion (inno a ion inpu ,
inno a ion ou pu , and inno a ion e iciency). O e all, his s udy holds c ucial implica ions
o bo h i ms and policymake s, o e ing insigh s in o enhancing he compe i i eness and
inno a ion alue o he manu ac u ing indus y h ough equi y incen i es.
1. In oduc ion
I is widely ecognized ha co po a e inno a ion is i al o sus aining compe i i eness and enhancing
i m alue (Bae , 2012; Jun & Wang, 2018; Yuan & Wen, 2018). Gi en i s pi o al ole in d i ing compe i-
i eness, nume ous s udies ha e explo ed he equi y cha ac e is ics ha incen i ize such inno a i e
beha io . F om he pe spec i e o inno a ion ou pu , hese a ibu es encompass ac o s such as s a e
owne ship (Zhang e al., 2022), ins i u ional owne ship (Rong e al., 2017), o eign owne ship (Joe e al.,
© 2024 he au ho (s). Published by in o ma uK Limi ed, ading as aylo & F ancis g oup.
CONTACT abdul Hadi Zulka li [email p o ec ed]y Finance sec ion, school o Managemen , uni e si i sains Malaysia, Penang, Malaysia
h ps://doi.o g/10.1080/23311975.2023.2289202
his is an open access a icle dis ibu ed unde he e ms o he C ea i e Commons a ibu ion License (h p://c ea i ecommons.o g/licenses/by/4.0/), which
pe mi s un es ic ed use, dis ibu ion, and ep oduc ion in any medium, p o ided he o iginal wo k is p ope ly ci ed. he e ms on which his a icle has been
published allow he pos ing o he accep ed Manusc ip in a eposi o y by he au ho (s) o wi h hei consen .
ARTICLE HISTORY
Recei ed 18 Oc obe
2023
Re ised 25 No embe
2023
Accep ed 25 No embe
2023
KEYWORDS
Manage ial owne ship;
co po a e inno a ion;
agency heo y; inpu
channel; e iciency
channel
JEL CLASSIFICATIONS
O31; O32; O38
REVIEWING EDITOR
Collins N im, Uni e si y o
Sou hamp on, Uni ed
Kingdom o G ea B i ain
and No he n I eland
2 T. PU AND A. H. ZUlKAFlI
2019), and owne ship concen a ion (Nguyen e al., 2021). Howe e , he e is a limi ed body o esea ch
ha sys ema ically in es iga es he po en ial o manage ial owne ship in p omo ing co po a e inno a ion.
This s udy aims o b idge his gap by explo ing he impac o manage ial owne ship on co po a e
inno a ion wi hin he Chinese manu ac u ing sec o . O e he pas ew decades, China’s economic land-
scape has unde gone a p o ound ans o ma ion, wi h i s manu ac u ing sec o ou pu consis en ly
secu ing i s posi ion as he wo ld leade o 13 consecu i e yea s, as o 2022 (Minis y o Indus y and
In o ma ion Technology o China, 2023). E en when con on ed wi h an inno a ion c isis in in e na ional
compe i ion, manage ial owne ship emains a pi o al d i ing o ce in s a egic decision-making, esou ce
alloca ion, and he inno a ion p ocess wi hin Chinese manu ac u ing i ms (Jun & Wang, 2018; Shan,
2019; Wen e al., 2022; Yuan & Wen, 2018; Zhang e al., 2022). In ac , he o e all sample yea ly mana-
ge ial sha eholding a es o Chinese lis ed manu ac u ing sec o we e analysed (Figu e 1), and su p is-
ingly, hey a e obse ed o g ea ly luc ua e and ange be ween 5% and 20%. Thus, i inc eases he
in e es o his s udy in ying o un eil he in ica e mechanisms h ough which manage ial owne ship
in luences inno a ion ou pu . Al hough ou empi ical e idence is based on da a om he Chinese lis ed
manu ac u ing i ms, we belie e ha he esul s o ou s udy a e also ele an o o he eme ging econ-
omies ha sha e simila cha ac e is ics wi h China.
Exis ing esea ch has indica ed ha inno a ion p ojec s ace long- e m isks o ailu e, which may ha e
ad e se implica ions o manage s’ sho - e m pe sonal in e es s and ca ee p ospec s (Holms om, 1989;
Iqbal e al., 2020; Joe e al., 2019). F om he pe spec i e o agency heo y, inno a ion ac i i ies en ail an
agency con lic be ween he long- e m in e es s o sha eholde s and he sho - e m pe sonal in e es s o
manage s (Holms om, 1989; Salehi e al., 2018). To mi iga e his con lic o in e es , he ampli ica ion o
manage ial owne ship aligns he in e es s o manage s and sha eholde s, he eby educing agency cos s
(Hi shlei e & Thako , 1992; Jun & Wang, 2018; Nguyen e al., 2021). While heo e ically, manage ial own-
e ship may be bene icial o co po a e inno a ion, he mechanisms unde lying his ela ionship emain
unclea , pa icula ly wi hin he con ex o China.
Figu e 1. he end o manage ial sha eholding a es in he Chinese lis ed manu ac u ing sec o (2008–2021). no e: he
s udy has used he indus y mean alue o manage ial owne ship in his igu e.
COGENT BUSINESS & MANAGEMENT 3
In addi ion, wi h he p esence o simila legal amewo ks and s anda ds in pa en sys ems globally,
pa en da a se e as a uni e sally applicable indica o o inno a ion ou pu (Higham e al., 2021). This
s udy elies on pa en da a o gauge co po a e inno a ion, acili a ing in e na ional compa isons and
compe i i e analyses among manu ac u ing i ms wo ldwide. Speci ically, his s udy e i ies whe he
manage ial owne ship p omo es co po a e inno a ion and u he in es iga es wo channels h ough
which manage ial owne ship in luences co po a e inno a ion. On he one hand, i examines whe he
manage ial owne ship enhances co po a e inno a ion by inc easing he i m’s esea ch and de elopmen
in es men ( e e ed o as he ‘inpu channel’). On he o he hand, i sc u inizes inno a ion e iciency in
compa ing he le el o pa en ou pu a e con olling o esea ch and de elopmen in es men , p o id-
ing u he insigh s in o he ‘e iciency channel’.
This pape has some po en ial con ibu ions. Fi s , i en iches he g owing body o li e a u e conce ning
he economic implica ions o manage ial owne ship. Despi e i s signi icance as a co po a e go e nance
mechanism, empi ical e idence ega ding he ela ionship be ween manage ial owne ship and co po a e
inno a ion emains spa se. The closes s udy in alignmen wi h ou opic is Choi e al. (2011), which exam-
ined he impac o inside owne ship (including he ounde s o i ms and hei amilies, a ilia es, manage s,
execu i e di ec o s, and employees) on inno a ion in 548 Chinese i ms using da a om 2001 o 2004.
In o med by Choi e al. (2011), ou esea ch seeks o elucida e pa hways ha ansla e manage ial owne -
ship in o excep ional pe o mance in co po a e inno a ion. Meanwhile, he s udy inds ha inc easing man-
age ial owne ship posi i ely co ela es wi h inno a ion inpu , inno a ion e iciency and inno a ion ou pu .
These indings u he subs an ia e he in luence o manage ial owne ship on i ms’ inno a ion ac i i ies.
Second, he posi i e impac o manage ial owne ship on co po a e inno a ion p o ides nuanced e i-
dence o he policymake s o eme ging coun ies, which complemen s he li e a u e on eme ging coun-
ies’ inno a i e ac i i ies. In p e ious esea ch li le men ion has been made o he oles o manage ial
owne ship in inno a ing eme ging coun ies, and his s udy has explo ed new insigh s in o his a ea. I
is also an impo an inspi a ion o eme ging economies ha a e seeking o sea ch o co po a e go e -
nance mechanisms o inno a ion sys ems o make a egime shi o an inno a i e economy o he man-
u ac u ing sec o .
The pape is o ganized in o he ollowing pa s: Sec ion 2 p esen s he backg ound. Sec ion 3 b ie ly
summa ises he ele an heo e ical li e a u e. Sec ion 4 p o ides a li e a u e e iew and de elops he
hypo heses. Sec ion 5 desc ibes he da a sou ces and me hodology. Sec ion 6 empi ically es s he
impac o manage ial owne ship on co po a e inno a ion, se s ou obus ness checks and u he analy-
ses he in luence mechanism. Finally, Sec ion 7 concludes his s udy.
2. Resea ch backg ound
2.1 The c isis o inno a ion in he Chinese manu ac u ing indus y
O e he yea s, bene i ing om he subs an ial ad an age o he ‘demog aphic di idend,’ unique Chinese
economic phenomena such as ‘Made in China’, ‘Sma Manu ac u ing in China’, and he label ‘Wo ld
Fac o y’ ha e been endu ing opics in discussions among economis s and policymake s (e.g. Cai & Wen,
2012; Wang e al., 2021). Wha puzzled hem was ha wi hin a me e nine yea s a e China’s accession
o he Wo ld T ade O ganiza ion on Decembe 11, 2001, he ou pu alue o China’s manu ac u ing
indus y consis en ly anked i s globally om 2010 onwa ds. Some schola s con end ha China’s suc-
cess s ems om i s low labo cos s and he as domes ic ma ke , a ac ing global capi al o in es in
manu ac u ing acili ies, he eby es ablishing i sel as an indispensable o ce in he global manu ac u ing
landscape (e.g. Ceglowski & Golub, 2012; Kla ke e al., 2018).
Howe e , despi e he colossal scale o i s ou pu , China’s manu ac u ing indus y has his o ically ope -
a ed a he lowe end o he alue chain (liu e al., 2022). The apidly aging popula ion and he swi
ise in labo cos s wi hin China ha e in ensi ied he inno a ion compe i i eness c isis in i s manu ac u -
ing indus y (Zheng e al., 2023). An undeniable phenomenon is he escala ing se e i y o labo cos
inc eases, pa icula ly among op managemen (Buck e al., 2008; Cheng e al., 2019). Gi en he c ucial
ole ha op managemen plays in shaping he inno a ion en i onmen , o mula ing inno a i e s a e-
gies, and d i ing inno a i e p ojec s, he manu ac u ing sec o in China has adop ed long- e m
4 T. PU AND A. H. ZUlKAFlI
incen i es, including equi y, o alle ia e po en ial agency con lic s (Jiang & Kim, 2020). These dis inc i e
go e nance p ac ices, along wi h hei unde lying impac mechanisms, may di e om hose in o he
de eloped economies. This unique go e nance en i onmen p o ides a no ewo hy dimension wo hy o
explo a ion o eme ging economies.
2.2 Backg ound o ecen de elopmen s in inno a ion measu emen
His o ically, he de elopmen s in inno a ion measu emen ha e been a long-deba ed opic in he ields
o echnology and inno a ion managemen (Chiesa, 1999; C iscuolo e al., 2017). Some schola s ad oca e
p oac i e explo a ion in measu ing co po a e inno a ion (e.g. Ma kham & lee, 2013). Schola s in his
domain a gue ha de eloping mul idimensional measu es o inno a ion can assis manage s in p omo -
ing s uc u al causal ela ionships, ensu ing comp ehensi e suppo , and e ec i e execu ion o inno a-
ion. In con as , o he s a gue ha he c i e ia o measu ing co po a e inno a ion may impede manage s
om pu suing b eak h ough inno a ion ou comes, as i o ces a en ion on o a singula me ic (Abe ne hy
& B ownell, 1997; C iscuolo e al., 2017).
Co po a e inno a ion, is a i al amewo k o signi ican imp o emen s in p oduc s (goods o se -
ices), p ocesses, and p oduc ion me hods wi hin business p ac ices, wo kplace o ganiza ions, o ex e nal
ela ionships (Azeem e al., 2021; Tushman & Nadle , 1986). Mos iews emphasize ha i s measu emen
should encompass di e se in o ma ion and p ocesses (e.g. Abe ne hy & B ownell, 1997; Bessono a &
Goncha , 2017; Jia e al., 2019; lan z & Sahu , 2005). Typically, inno a ion ac i i ies in ol e inpu s in o
inno a ion, he e iciency o ans o ming inno a i e elemen s, and he quali y o inno a i e ou comes.
The e o e, ea ly measu es o co po a e inno a ion o en ocused on R&D inpu s and inno a ion e iciency
(Chen e al., 2017). A con en ious issue lies in ac o s such as i m size, indus y compe i i eness, and
inno a ion capabili ies, which o en de e mine he magni ude o R&D inpu s and e iciency (Campbell
e al., 2006; Machoko o e al., 2021; She & Yang, 2005; Tsai, 2005). Addi ionally, manipula ion o R&D
inpu s can mislead he a ionale o me ics based on R&D inpu s and e iciency (Hsu & Hsueh, 2009).
F om he pe spec i es o in en ion and echnology, he e is a close connec ion be ween pa en ac i -
i ies and inno a ion. Recen li e a u e ecognizes ha he ou pu o inno a ion i sel is a speci ic s age
in he inno a ion p ocess, ca ego ized in o echnological inno a ion and ins i u ional inno a ion based
on objec s and inc emen al inno a ion and adical inno a ion based on deg ee (Chen & Kim, 2023;
Coccia, 2016). The undamen al p ocess o inno a ion includes: (1) inpu in o inno a ion, i.e. he conduc
o R&D ac i i ies; (2) in e media e inno a ion ou pu , i.e. he o ma ion o in en ions, including he in en-
ion o pa en ed applica ions; and (3) inal inno a ion ou pu , such as new p oduc s. The p ocess o
pa en ou pu is o en he R&D esul s o scien i ic and echnological esea ch, indica ing a close link
be ween pa en s and R&D ac i i ies and expendi u es, as ex ensi ely e i ied in empi ical esea ch (e.g.
Hsu & Hsueh, 2009; Miguélez & Mo eno, 2015).
In addi ion, pa en applica ions a e usually pu sued o comme cializa ion pu poses, in ol ing high
ime and capi al cos s o applica ion and main enance, e lec ing he applican ’s belie ha applying o
pa en s o speci ic echnologies can yield an icipa ed e u ns (Cappelli e al., 2023; Mochly‐Rosen e al.,
2023). In o he wo ds, applican s belie e ha pa en s ha e a leas a po en ial ole in economic de el-
opmen , leading hem o in es in R&D and o he inno a ion elemen s. When his po en ial ole ans-
o ms in o eali y, pa en s become powe ul e idence o inno a ion. A he same ime, u ilizing e idence
om pa en ac i i ies as a p oxy o co po a e inno a ion challenges p e ious conclusions abou he
de e minan s o co po a e inno a ion.
3.Theo e ical li e a u e e iew
As i m g ow h accompanies changes in co po a e go e nance mechanisms, he sepa a ion o owne -
ship and con ol eme ges as a consequence o his phenomenon (Jensen & Meckling, 1976; O’Conno
& Ra e y, 2012). Acco ding o agency heo y, he go e nance p ocess o a i m is no p incipal-d i en
bu agen -d i en, culmina ing in he mani es a ion o agency p oblems (E iqa e al., 2023; Holms om,
1989; Shlei e & Vishny, 1986). Due o he incomple e moni o ing o manage s (agen s) by sha eholde s
COGENT BUSINESS & MANAGEMENT 5
(p incipals), a decline in sha eholde powe and a g adual enhancemen o manage ial au ho i y ensue
(Cohen e al., 2013; Hi shlei e & Thako , 1992; Holms om, 1989).
Co po a e go e nance ep esen s one o he mechanisms o alle ia e agency p oblems be ween
sha eholde s and manage s in capi al ma ke s (Hi shlei e & Thako , 1992; Peppe , 2018; Shlei e & Vishny,
1986). Acco ding o he pe spec i e o Palia and lich enbe g (1999), in o ma ion asymme y mo i a es
sel -in e es ed manage s o shi k esponsibili ies o exploi i m esou ces o pe sonal gain, such as pu -
suing sala y allowances and in-job consump ion. In such cases, wi h he ampli ica ion o manage ial
owne ship, an incen i e-compa ibili y e ec eme ges, as i equen ly aligns manage ial and sha eholde
in e es s mo e closely, diminishing manage ial isk and consequen ly educing agency cos s (Jensen &
Meckling, 1976; O’Conno & Ra e y, 2012; Zhang e al., 2018). Simul aneously, changes in i m equi y
s uc u e enable manage s o acqui e a g ea e sha e o i m income om isky ac i i ies. Thus, when he
alignmen o manage s’ in e es s wi h hose o sha eholde s becomes mo e obus , hey a e mo e inclined
o in es in p ojec s ha maximize i m alue (laux & Ray, 2020; Mo ck e al., 1988).
4. Empi ical li e a u e e iew and hypo hesis de elopmen
The p ima y objec i e o sha eholde s when conside ing in es men in inno a ion ac i i ies is o maxi-
mize he i m’s p o i s and achie e ou s anding long- e m pe o mance (Bessono a & Goncha , 2017;
Iqbal e al., 2020). Ne e heless, manage s ha e p e equisi es such as job s abili y, a good pe sonal ep-
u a ion, and sho - e m income be o e achie ing he a o emen ioned goal (Jensen & Meckling, 1976; Jun
& Wang, 2018; laux & Ray, 2020). Meanwhile, he e exis s an in o ma ion asymme y be ween sha ehold-
e s and manage s, which leads o insu icien moni o ing o manage ial beha iou , esul ing in con lic s
o in e es and agency p oblems (Cohen e al., 2013; Palia & lich enbe g, 1999; Salehi e al., 2018).
On he one hand, one limi a ion o inno a ion caused by agency p oblems is he di e en in es men
mo i a ions o manage s. Compa ed o sha eholde s, manage s ha e mo e ad an ages in e ms o in e -
nal in o ma ion wi hin he i m, and hey ha e he au ho i y o decide whe he o in es in con en ional
p ojec s o iskie inno a ion ac i i ies (Jun & Wang, 2018). P io esea ch demons a es ha manage s
end o make sho - e m in es men s o expand he size o he i m, he eby inc easing hei own com-
pensa ion and p i ileges (Cohen e al., 2013; Palia & lich enbe g, 1999). This beha iou o en se es he
pe sonal in e es s o manage s, bu sac i ices long- e m p o i oppo uni ies o sha eholde s.
On he o he hand, one u he limi a ion o inno a ion caused by agency p oblems is he di e en
isk appe i es o manage s and sha eholde s. Due o isk a e sion, manage s o en demons a e manage-
men conse a ism and in en ionally s ee clea o isky en u es, ul ima ely leading o a dec ease in
inno a i e ou pu (Chen e al., 2020; Hi shlei e & Thako , 1992; laux & Ray, 2020). Gene ally, he pe sonal
p o i o manage s is la gely dependen on he pe o mance o he i m hey manage, especially when
sho - e m pe o mance a ec s hei income and he isk o unemploymen . High- isk inno a ion ac i i-
ies o en encou age manage s o a oid po en ial ailu es, he eby educing hei commi men (Chen
e al., 2020; Jensen & Meckling, 1976; Jun & Wang, 2018; laux & Ray, 2020).
In con as , sha eholde s may ha e di e en isk appe i es. Acco ding o Bae (2012), inno a ion con-
ibu es o he sus ained achie emen o ou s anding i m pe o mance and s imula es i m g ow h. This
is why sha eholde s o en a o i ms ha ha e esea ch and de elopmen p ojec s and a e commi ed
o long- e m p o i abili y (Cohen e al., 2013; Jun & Wang, 2018; Yuan & Wen, 2018; Zhang e al., 2018).
Due o he sha e’s op ion-like cha ac e is ics, sha eholde s o en a ou isky p ojec s, as he alue o
hei sha es may inc ease wi h he disclosu e o inno a ion p ojec s and a ac ma ke a en ion (Bai
e al., 2023; He e al., 2022; Jun & Wang, 2018). Addi ionally, success ul inno a ion p ojec s may gene a e
signi ican e u ns ha sha eholde s can also sha e (Chen e al., 2020; Yuan & Wen, 2018; Zhang e al.,
2018). Howe e , hese isks con lic wi h he pe sonal in e es s o manage s (Chiesa & F a ini, 2011; Jun
& Wang, 2018).
Con lic s o in e es be ween manage s and sha eholde s a ise in inno a ion ac i i ies due o hei
a ying in es men mo i a ions and isk appe i es. Equi y incen i es a e well known as a ool o he
imp o emen o co po a e go e nance ha unc ions as an incen i e o mo i a e manage s o ake isks
and inc ease hei e o s o align he in e es s o sha eholde s and manage s (Chiesa & F a ini, 2011;
6 T. PU AND A. H. ZUlKAFlI
Cohen e al., 2013; Cosci e al., 2015; Jensen & Meckling, 1976; Zhou e al., 2021). The e o e, manage ial
owne ship can o e a bene i in inno a ion ope a ion e iciency by encou aging manage s o shoulde
excessi e isk and in es in long- e m, inno a i e p ojec s. This ul ima ely esul s in he alignmen o
sha eholde s’ and manage s’ in e es s (Peppe , 2018; Salehi e al., 2018).
O e all, he abo e discussion has led o he ollowing hypo hesis:
H1: Ce e is pa ibus, manage ial owne ship has a posi i e impac on co po a e inno a ion.
5. Resea ch design
5.1. Da a sou ces and sample
This s udy ob ained he owne ship s uc u e and inancial in o ma ion o all A-sha e Chinese lis ed manu-
ac u ing i ms on he Shanghai and Shenzhen s ock ma ke s om he CSMAR da abase o 2008–2021, and
pa en in o ma ion was sou ced om he CNRDS da abase. Following he app oaches o Yuan and Wen
(2018) and Zhang e al. (2022), his s udy c oss- e i ied wi h annual epo s and o icial websi es by he
i m’s own in o ma ion. Meanwhile, he da a unde wen he ollowing p ep ocessing s eps: i s , ‘special
ea men ’ i ms ( e e ing o i ms wi h con inuous losses o wo consecu i e yea s and acing delis ing
isk) we e excluded o a oid in e e ence om abno mal inancial condi ions; second, obse a ions wi h
missing in o ma ion we e dele ed o mi iga e he impac o missing alues on he esul s; hi d, o minimize
he in luence o ex eme alues, all con inuous a iables we e winso ised a he 1s and 99 h pe cen iles.
5.2. Va iable measu emen and model speci ica ion
The dependen a iable o his s udy was co po a e inno a ion. I s measu emen uses ou pa en olume
pieces o in o ma ion om he CNRDS da abase as he sou ce o inno a ion le el. I is a p o essional pa en
sys em co e ing a numbe o measu emen sou ces and pa en in o ma ion da a analysis. Following pas
s udies (e.g. Ding e al., 2022; Iqbal e al., 2020; Yuan & Wen, 2018), he i s measu e, Pa en _ o al, ep-
esen s he na u al loga i hm o a i m’s o al pa en s applied o plus one, including in en ion pa en s,
design pa en s, and u ili y pa en s. The second, Pa en _in en ion, ep esen s he na u al loga i hm o a
i m’s in en ion pa en s applied o plus one. The hi d measu e is Pa en _ G o al, which is he na u al log-
a i hm o a i m’s o al pa en s g an ed plus one. The ou h measu e is Pa en _ Gin en ion, which is he
na u al loga i hm o a i m’s in en ion pa en s g an ed plus one. I should be emphasized ha he hi d
and ou h indica o s se e as measu es o co po a e inno a ion o obus ness checks.
The independen a iable o ou ocus is manage ial owne ship (MO). Following he app oach o
Himmelbe g e al. (1999), his s udy uses a io a iables o measu e MO, he o al equi y holdings o op
managemen , as a ac ion o a i m’s o al equi y.
In e ms o con ol a iables, ollowing pas s udies (e.g. Ding e al., 2022; Jia e al., 2019; liu & l ,
2022; Yuan & Wen, 2018), his esea ch con olled a se ies o a iables ha may be biased o co po a e
inno a ion, such as i m age (FA), i m size (FS), e u n on asse s (ROA), inancial le e age (lEV), cash a io
(CR), asse u no e (AT), sales g ow h (SG), and owne ship concen a ion (OC). Mo eo e , his s udy also
con ols o he impac o i m and annual ac o s o cap u e he i m ixed e ec and dynamics o
changes in he mac oeconomic condi ions common o all i ms o e he sample pe iod, espec i ely.
Appendix A p esen s he de ini ions o all a iables in his s udy.
The ollowing equa ion is used o in es iga e he ela ionship be ween manage ial owne ship and
co po a e inno a ion.
Pa en o al Pa en in en ion MO FA FS
i i i i
__
, ,,
()
=+ ++
αα α α
0 1 2 3 ,, , , , ,
,,
i i i i
i i
ROA LEV CR AT
SG OC Yea
+ + ++
++ +
α α αα
αα
4 5 67
89 ++ +Fi m
ε
(1)
whe e
α
0
deno es he in e cep , and
αα
19
−
a e he coe icien s o be es ima ed. This s udy added
dummy a iables ha con ol o yea and i m ixed e ec s (Yea and Fi m), ε is he e o e m, i deno es
he c oss-sec ional dimension o i ms, and deno es he ime se ies dimension.
COGENT BUSINESS & MANAGEMENT 7
6. Empi ical esul s and discussion
6.1. Desc ip i e s a is ics and co ela ion ma ix
Table 1 epo s he dis ibu ion o dummy a iables in he i m wi h manage ial owne ship o e he
sample pe iod. In his able, i can be seen ha mo e han hal o he o al sample o i ms had mana-
ge ial sha eholdings wi hin he pe iod om 2008 o 2021. Ac oss all obse ed yea s, i ms wi h manage-
ial owne ship had he lowes p opo ion in he ini ial sample yea o 2008, app oxima ely 71.9%. The
highes p opo ion occu ed in he inal yea o ou sample, 2021, eaching i s peak a a ound 88.68%.
The o e a ching end indica es a g adual inc ease in he p e alence o i ms wi h manage ial owne ship.
Table 2 illus a es he desc ip i e s a is ics o he a iables used in his esea ch. Fo he pa en appli-
ca ion indica o s, he mean and s anda d de ia ion o Pa en _ o al (Pa en _in en ion) a e 2.979 and
1.571 (2.094 and 1.458), espec i ely. Fo he pa en g an indica o s, he mean and s anda d de ia ion
o Pa en _G o al (Pa en _Gin en ion) a e 2.795 and 1.515 (1.386 and 1.250), espec i ely. These igu es
unde line he conside able a ia ion in inno a ion ou pu among he sampled i ms. On a e age o e he
14 yea s o i m-le el obse a ions, manage ial owne ship (MO) is 17.352%. Howe e , o some i ms,
manage ial owne ship could be as high as 73.266%.
Rega ding he con ol a iables, he sample means include an a e age i m age (FA) o 2.816, i m
size (FS) o 21.955, e u n on asse s (ROA) o 0.051, inancial le e age a io (lEV) o 3.952, cash a io (CR)
Table 1. sample dis ibu ion.
Yea o al Dummy (Mo)=0 Dummy (Mo)=1 Pe cen age (%)
2008 548 154 394 71.90
2009 592 155 437 73.82
2010 809 193 616 76.14
2011 1002 235 767 76.55
2012 1113 254 859 77.18
2013 1095 223 872 79.63
2014 1165 205 960 82.40
2015 1321 196 1125 85.16
2016 1477 218 1259 85.24
2017 1795 229 1566 87.24
2018 1854 213 1641 88.51
2019 1977 224 1753 88.67
2020 2283 269 2014 88.22
2021 2641 299 2342 88.68
o al 19672 3067 16605 100.00
his able displays he dis ibu ion o he sample o e he pe iod 2008 o 2021.
Table 2. Desc ip i e s a is ics.
NMean s d. De Min Max
Panel a: Dependen a iables
Pa en _ o al 20060 2.979 1.571 0.000 7.347
Pa en _in en ion 20060 2.094 1.458 0.000 6.565
Pa en _g o al 20060 2.795 1.515 0.000 6.899
Pa en _gin en ion 20060 1.386 1.250 0.000 5.740
Panel B: independen a iable
Mo 19672 17.352 21.485 0.000 73.266
Panel C: Con ol a iables
Fa 20046 2.816 0.367 0.693 4.159
Fs 20046 21.955 1.151 19.539 25.852
Roa 18274 0.051 0.060 −0.285 0.280
LeV 20046 3.952 3.473 1.222 35.362
CR 20046 0.053 0.065 −0.178 0.308
a 18274 0.693 0.389 0.121 3.219
sg 18273 0.173 0.309 −0.533 2.680
oC 20046 34.291 14.231 8.448 77.018
Panel D: o he a iables
Bs 20044 2.117 0.189 1.609 2.708
Bi 20044 37.479 5.331 25.000 57.140
Dual 20046 0.320 0.467 0.000 1.000
R&D 20060 0.023 0.018 0.000 0.121
This able displays desc ip i e s a is ics o he main a iables de ined in Appendix A co e ing he sample pe iod 2008-2021. All
con inuous a iables we e winso ised a he 1s and 99 h pe cen iles.
14 T. PU AND A. H. ZUlKAFlI
Ne e heless, his s udy has se e al limi a ions. Fi s , i measu es co po a e inno a ion solely using pa en da a,
which se e as legal p o ec ion o he holde ’s in ellec ual p ope y. Howe e , no all i ms p o ec hei echnological
asse s and inno a ion h ough pa en s. Some may p e e o ea hei expe ise as a ade sec e o implemen o ga-
niza ional mechanisms o p o ec inno a ion. Second, he gene alizabili y o he indings is limi ed by ou use o one
coun y as he esea ch con ex . To ackle hese limi a ions, u u e wo k should aim o add ess hese limi a ions by
conside ing mo e ypes o co po a e inno a ion measu es and adding o he eme ging economies. These ex ensions
will u he deepen ou unde s anding o he impac o co po a e inno a ion in eme ging economies om a mana-
ge ial owne ship pe spec i e.
Acknowledgemen
The au ho s hank Collins G. N im (edi o ), and wo anonymous e iewe s o use ul commen s.
Au ho s’ con ibu ions
Tingqian Pu: s udy concep ion, da a collec ion, analysis and in e p e a ion o esul s, and w i ing o iginal d a . Abdul
Hadi Zulka li: heo y, alida ion, me hodology, e ising i c i ically o in ellec ual con en , supe ision and p ojec
adminis a ion.
Disclosu e s a emen
No po en ial con lic o in e es was epo ed by he au ho s.
Abou he au ho s
Tingqian Pu is a Ph.D. candida e in Finance a he School o Managemen , Uni e si i Sains Malaysia. His esea ch
in e es s ela e o in e na ional inance, co po a e inance and inno a ion.
Abdul Hadi Zulka li is an Associa e P o esso o Finance a he Finance and Islamic Finance Sec ion, School o
Managemen , Uni e si i Sains Malaysia. He has a Mas e o Business Adminis a ion om he Uni e si i Kebangsaan
Malaysia and a Doc o al deg ee om Uni e si i Malaya, Malaysia. His esea ch in e es s ocus on co po a e inance
and co po a e go e nance.
In o med consen s a emen
In o med consen was ob ained om all indi idual pa icipan s in ol ed in he s udy.
Funding
This s udy did no ecei e any speci ic g an om unding agencies in he public, comme cial, o no - o -p o i
sec o s.
ORCID
Tingqian Pu h p://o cid.o g/0000-0002-6618-5891
Abdul Hadi Zulka li h p://o cid.o g/0000-0001-6087-1746
Da a a ailabili y s a emen
The da a ha suppo he indings o his s udy a e a ailable om he co esponding au ho upon easonable eques .
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18 T. PU AND A. H. ZUlKAFlI
Appendix A:Va iable de ini ions and measu emen
Measu emen Re e ences
Panel a: Dependen a iables
Pa en _ o al he na u al loga i hm o i m’s o al pa en s
(in en ion, design and u ili y) applied plus
one.
(iqbal e al., 2020; Yuan & Wen, 2018)
Pa en _in en ion he na u al loga i hm o i m’s in en ion
pa en s applied plus one.
(iqbal e al., 2020; Yuan & Wen, 2018))
Pa en _g o al he na u al loga i hm o i m’s o al pa en s
(in en ion, design and u ili y) g an ed plus
one.
(Ding e al., 2022)
Pa en _gin en ion he na u al loga i hm o i m’s in en ion
pa en s g an ed plus one.
(Ding e al., 2022)
Panel B: independen a iables
Manage ial owne ship (Mo) he o al equi y holdings o op managemen
as a ac ion o i m’s o al equi y.
(Himmelbe g e al., 1999)
Panel C: Con ol a iables
Fi m age (Fa) he na u al loga i hm o he numbe o yea s
since he i m’s es ablishmen plus one.
(Liu & L , 2022)
Fi m size (Fs) he loga i hm o o al asse s o a i m. (Ding e al., 2022)
Re u n on asse s (Roa) he ne income o a i m di ided by o al
asse s.
(Yuan & Wen, 2018)
Financial Le e age (LeV) he o al deb s o a i m di ided by o al
asse s.
(Yuan & Wen, 2018)
Cash Ra io (CR) he cash holdings o a i m di ided by o al
asse s.
(Yuan & Wen, 2018)
asse u no e (a ) he o al e enues di ided by o al asse s. (Yuan & Wen, 2018)
sales g ow h (sg) he a io o he ope a ing income changed o
he ope a ing income in he las yea .
(Yuan & Wen, 2018)
owne ship Concen a ion (oC) he pe cen age o sha es held by he bigges
sha eholde .
(Jia e al., 2019)
Panel D: o he a iables
Boa d size (Bs) he na u al loga i hm o o al numbe o
boa d membe s.
(Mcguinness e al., 2017)
Boa d independence (Bi) he pe cen age o independen di ec o s
wi hin he boa d.
(Yuan & Wen, 2018)
Ceo Duali y (Dual) Dummy alue equals 1 i Ceo and Chai man o
he boa d a e he same pe son.
(Jun & Wang, 2018)
Resea ch and De elopmen (R&D) he a io o R&D in es men o o al asse s. (B ick e al., 2006)
