| Since the reform and opening-up policy in 1978,China has experienced nearly forth years of high growth,and "Made-in-China" has won an important position for us in the global market.However,exports from China were driven by processing trade and labor-condensed,low value-added products,it is high time to improve our innovative ability in a high-tech era.Innovation is related to a firm’s competitiveness,and even the economic and political status of a country in the world.Therefore,Chinese government has identified the core role of independent innovation and made it a state policy constructing an innovation-oriented country during the year 2006-2020.Due to the dominant role of firm in innovation activities,study on the determinants of firm innovation has been a hotspot of academic research in recent years.In this dissertation,empirical research is conducted supplement this line of research from the perspectives of firm internal mechanisms and external institutions.Specifically,research is developed from four aspects:firm pay gap,organization capital,political connection and legal protection.Conclusions are as follows.First,firm pay gap reflect tangible incentives provided by the compensation schemes in firms.After examining the effects of the pay gap on firm innovation by using data from Chinese listed firms,the results show that the first-order effect of pay gap on firm innovation is significantly positive,supporting the tournament theory;however,when pay gap is relatively high,the importance of comparison theories increases;high management pay premiums provide incentives for management to devote to innovation activities,while pay premiums for ordinary employees impede firm innovation;both the employee’s human capital and state ownership play significant roles in the negative effects of employee pay premiums on firm innovation.Second,based on the quantitative measure of organization capital,this paper examines the effect of firm-specific organization capital,a proxy of intangible incentives,on firm innovation,and shows that organization capital facilitates innovation significantly;state-ownership reduce the innovation efficiency of organization capital while intense industrial competition and and large intra-firm pay gap promotes the positive effect of organization capital.Further investigation reveals that companies with more organization capital conduct more creative destruction activities.Third,as an informal system,political connection is prevailing and influential in China.The effect of political connection on innovation output is investigated in this dissertation.The results show that political connection impedes innovation,and the negative effect is more pronounced in highly-concentrated industries and highly-marketized provinces.Further,political connection with different hierarchy of government has different effect on firm innovation,political connection with local government rather central is the main resource of the negative impact.Finally,this dissertation also focuses on the influence of regional legal protection on firm innovation.The protection of intellectual property rights,market organization serviceconditions significantly promoted firm innovation,suggesting that legal protection provides incentives for firm innovation;firm innovation in state-owned enterprises depends less on lawyers,accountants and other market organization service conditions,indicating their resources superiority in market service;in regions with lower level of social trust,firm innovation relies more on legal protection,reflecting the substitution effect between informal and formal institutions.Overall,this dissertation expands our understanding about the effects firm internal mechanisms and external institutions on firm innovation,and providing critical insights and a serious challenge for firms and government.The policy implications of this study could be of interest to firms’ stakeholders and regulators who intend to encourage firm innovation. |
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