The Impact Of Party Organization Participation In Corporate Governance On The Innovation Capability Of State-owned Enterprises

In recent years,the Party Central Committee has always emphasised its leadership of the national economy and state-owned enterprises,and in this context,the participation of party members in internal governance in the form of "two-way entry and crossappointment" has become a characteristic system of corporate governance for stateowned enterprises.At the same time,as the backbone of the national economy,SOEs are also key players in the implementation of the national economic innovation system,and their innovation dynamics and capabilities fully reflect the national economic construction and development dynamics,which in turn affects the implementation of China’s innovation-driven development strategy.Studies have shown that the composition and power configuration of the executive team affects the innovation capacity of enterprises,and therefore Party Organizations should be involved in corporate governance in a reasonable manner in order to have a positive impact on the innovation capacity of state-owned enterprises.This paper builds an overall framework for research on the participation of Party Organizations in corporate governance and the innovation capability of state-owned enterprises,specifically analyses the participation model of "two-way entry and crossemployment",combines previous theoretical studies,and selects a sample of A-share listed state-owned enterprises in China from 2016 to 2020 to empirically test the impact of Party Organization participation in corporate governance on the innovation capability of state-owned enterprises.The empirical test was conducted to examine the impact of Party Organization participation in corporate governance on the innovation capability of state-owned enterprises.The study finds that:(1)the impact of Party Organization participation in corporate governance on the innovation capability of state-owned listed enterprises shows an inverted U-shaped relationship,i.e.moderate participation of Party Organizations in corporate governance can effectively improve the innovation capability of state-owned enterprises,while excessive participation of Party Organizations in corporate governance will reduce the innovation capability of state-owned enterprises.(2)The influence of Party Organization participation in corporate governance on the innovation capability of state-owned listed enterprises mainly works through two channels,namely the board of directors and the managerial level.It is suggested that Party Organizations should be involved in corporate governance in a relaxed manner,ensuring that they are neither absent nor out of position,so that the positive effects of Party Organization participation in corporate governance can be effectively reflected.