The Effects Of Board Structures On The Innovation Of Private Listed Firms:the Moderating Role Of Shangbang Culture

Nowadays, the government encourages people to start their businesses and to make innovations and the scholars also consent that it is important to encourage private enterprises to promote their own creative ability, because of the need to accelerate the transformation of the pattern of economic growth and to enhance our international competitive advantage. It is worth focusing on the decision-making process of the board, the core institution to make decisions, for the innovation performance. At the moment, the current studies seem to have the shortcomings in research paradigms and the methodologies, although their results on board governance are really abundant. This problem makes it difficult to open the "black box". What’s more, the current studies put little attention to the environment of the firms.This study adopts different theories, including agency theory, resource-based view, upper echelon theory and relational contract theory and explains how board formal and informal structural attributes are related to firms’ innovation is deeply explored.Theoretically, the aulthor investigates the board’s informal structure which is formed by invisible interactions among members. What’s more, it also discusses the moderating effect of the regional culture, combining with the innovation environment theory. The culture of Shangbang is a kind of regional culture, which owns the characteristic of inheritance and innovation. This paper chooses the five new Shangbang as research objects. This study can make contributions to the self-evaluation for board governance and the management of related departments for local listed private firms.Firstly, this study combs through the related literatures at home and abroad, and then poses 12 hypotheses. The study conducts hierarchical linear model to test the linear relationships between the independent variables as well as that between the moderating variable and the dependent variable, wtih a sample of 346 listed firms in the Hu Stock Exchange and Shen Stock Exchange during year 2012 and 2014.The main contributions of this study are:(1) It explores the board’s invisible attribute. This paper analyzes the dynamics in boardroom and informal hierarchy which is generated by such interactions consequently. (2) In this paper, the author leads culture into the corporate governance. It discusses the moderating effect of culture of Shangbang, which provides more explanations to operation mechanism of board structure and innovation. (3) The study conducts hierarchical linear model to test the effect of outside surroundings. It defines the scope of influence of the five new Shangbang, with the standard of province areas. The study chooses the mean of the application for patent of invention authorization number and the R&D spending of the first three years as the innovation index of different culture to solve the problem to measure the culture of Shangbang.