A Study of the Impact of Executive Corruption on Corporate Innovation
Abstract
:1. Introduction
2. Materials and Methods
2.1. Literature Review
2.1.1. Influencing Factors of Enterprise Innovation
2.1.2. The Economic Consequences of Executive Corruption
2.1.3. Correlation between Corporate Innovation and Financial Misconduct
2.2. Theory Analysis and Research Hypotheses
2.3. Research Design
2.3.1. Sample Selection and Data Source
2.3.2. Variable Definitions
- Enterprise Innovation
- Executive Corruption
- Financing Constraints
- Internal Control (IC)
- Educational Background of Executives (EDU)
- Nature of the Enterprise (SOE)
- Political Connection (PC)
- Audit Quality (AUDIT)
- Institutional Investor Ownership (INSP)
- Other control variables
2.3.3. Model Design
3. Results
3.1. Descriptive Statistics
3.2. Main Regression Results
3.3. Mediation Effect Test for Financing Constraints
3.4. Analysis of the Moderating Mechanism of Changes in Internal and External Environments
3.5. Endogeneity Test and Robustness Test
3.5.1. Endogeneity Test
- Instrumental Variable Method
- Propensity Score Matching Analysis (PSM)
3.5.2. Robustness Test
- Variable Replacement
- Regression Method Replacement
4. Discussion
Author Contributions
Funding
Data Availability Statement
Conflicts of Interest
References
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Variable Name | Abridgement | Definition |
---|---|---|
Enterprise size | SIZE | Natural logarithm of total assets of the enterprise at the end of the year |
Years of establishment of the enterprise | AGE | Natural logarithm of the number of years the business has been established |
Enterprise performance | ROA | Return on assets, i.e., the ratio of net profit for the year to total assets at the end of the year |
Growth | GROW | Year-on-year growth rate of operating income |
Financial leverage | LEV | Gearing ratio, which is the ratio of total liabilities to total assets |
Cash flows | CFO | Net cash flows from operating activities to total assets for the year |
Tobin’s Q value | TBQ | Tobin’s Q value |
Shareholding ratio of the largest shareholder | LARST | Shareholding ratio of the largest shareholder |
Monetary remuneration of executives | COMP | Logarithm of the sum of executive compensation for the first three years of the year |
Two jobs in one | DUAL | Dummy variable that takes the value of 1 if the current year’s Chairman and Managing Director are both appointed by the same person, and 0 otherwise. |
Variable Name | Observations | Minimum Value | Maximum Value | Mean Value | Median | Standard Deviation |
---|---|---|---|---|---|---|
RDIN | 21,444 | 0.0000 | 0.2535 | 0.0384 | 0.0316 | 0.0434 |
RDOUT | 21,444 | 0.0000 | 8.5875 | 2.3507 | 0.0000 | 2.6494 |
Corr | 21,444 | −0.0563 | 0.0905 | 0.0000 | −0.0025 | 0.0215 |
RDIN | 21,444 | 0.0000 | 0.2535 | 0.0384 | 0.0316 | 0.0434 |
RDOUT | 21,444 | 0.0000 | 8.5875 | 2.3507 | 0.0000 | 2.6494 |
Corr | 21,444 | −0.0563 | 0.0905 | 0.0000 | −0.0025 | 0.0215 |
AGE | 21,444 | 2.4849 | 3.6376 | 3.1685 | 3.1781 | 0.2137 |
SIZE | 21,444 | 19.7510 | 26.5249 | 22.2751 | 22.0894 | 1.2907 |
ROA | 21,444 | −0.2926 | 0.2276 | 0.0412 | 0.0379 | 0.0590 |
LEV | 21,444 | 0.0347 | 0.8923 | 0.4242 | 0.4163 | 0.2016 |
CFO | 21,444 | −0.1965 | 0.2436 | 0.0489 | 0.0476 | 0.0655 |
GROW | 21,444 | −0.6576 | 2.5807 | 0.1313 | 0.0902 | 0.3144 |
TBQ | 21,444 | 0.7908 | 13.3657 | 2.0191 | 1.6059 | 1.3097 |
LARST | 21,444 | 0.0826 | 0.7579 | 0.3444 | 0.3234 | 0.1472 |
COMP | 21,444 | 5.4501 | 7.2550 | 6.2702 | 6.2583 | 0.2989 |
DUAL | 21,444 | 0.0000 | 1.0000 | 0.2459 | 0.0000 | 0.4307 |
Variables | The Entire Sample (OLS) | Sample Excluding Firms with No R&D Activities (OLS) | ||
---|---|---|---|---|
(1) | (2) | (3) | (4) | |
RDIN | RDIN | RDIN | RDIN | |
Corr | −0.367 *** | −0.297 *** | −0.402 *** | −0.303 *** |
(−4.34) | (−3.23) | (−3.39) | (−3.38) | |
AGE | −0.034 *** | −0.026 *** | ||
(−2.73) | (−3.95) | |||
SIZE | 0.002 *** | 0.002 *** | ||
(3.24) | (3.89) | |||
ROA | 0.083 *** | 0.136 *** | ||
(5.30) | (5.69) | |||
LEV | −0.058 *** | −0.067 *** | ||
(−4.61) | (−5.09) | |||
CFO | 0.037 *** | 0.058 *** | ||
(3.66) | (3.73) | |||
GROW | 0.002 ** | 0.0007 | ||
(2.53) | (0.45) | |||
TBQ | 0.005 *** | 0.007 *** | ||
(3.05) | (3.88) | |||
LARST | −0.038 *** | −0.034 *** | ||
(−3.40) | (−3.20) | |||
COMP | 0.020 *** | 0.026 *** | ||
(3.65) | (3.28) | |||
DUAL | 0.007 *** | 0.005 *** | ||
(3.65) | (3.96) | |||
Constant | 0.038 *** | 0.094 *** | 0.051 *** | 0.039 *** |
(3.31) | (3.43) | (3.22) | (3.34) | |
Observations | 21,444 | 21,444 | 10,504 | 10,504 |
FIRM/YEAR | NO | YES | NO | YES |
Variables | (1) | (2) | (3) |
---|---|---|---|
RDIN | SA | RDIN | |
Corr | −0.297 *** | 0.619 *** | −0.285 *** |
(−3.23) | (2.97) | (−3.02) | |
SA | −0.010 *** | ||
(−3.58) | |||
AGE | −0.034 *** | −0.067 *** | −0.034 *** |
(−2.73) | (−3.37) | (−2.73) | |
SIZE | 0.002 *** | 1.230 *** | 0.014 *** |
(3.24) | (6.58) | (4.117) | |
ROA | 0.083 *** | −0.128 *** | 0.082 *** |
(5.30) | (−4.43) | (5.04) | |
LEV | −0.058 *** | −0.031 *** | −0.058 *** |
(−4.61) | (−3.89) | (−3.40) | |
CFO | 0.037 *** (3.66) | −0.038 *** (−3.75) | 0.036 *** (8.281) |
GROW | 0.002 ** | −0.010 *** | 0.002 *** |
(2.53) | (−4.61) | (2.65) | |
TBQ | 0.005 *** | 0.016 *** | 0.005 *** |
(3.05) | (3.25) | (2.92) | |
LARST | −0.038 *** | 0.052 *** | −0.038 *** |
(−3.40) | (3.28) | (−2.63) | |
COMP | 0.020 *** | −0.008 *** | 0.020 *** |
(3.65) | (−2.93) | (2.72) | |
DUAL | 0.007 *** | 0.008 *** | 0.006 *** |
(3.65) | (5.15) | (3.52) | |
Constant | 0.094 *** | −22.30 *** | 0.312 *** |
(3.43) | (−3.86) | (5.08) | |
Observations | 21,444 | 21,444 | 21,444 |
R-squared | 0.090 | 0.994 | 0.090 |
FIRM/YEAR | YES | YES | YES |
Variables | (1) | (2) | (3) | (4) | (5) | (6) |
---|---|---|---|---|---|---|
Weak Internal Control | Strong Internal Control | No Professional Background | Professional Background | Non-State-Owned Enterprise | State-Owned Enterprise | |
Corr | −0.267 *** | −0.005 | −0.100 | −0.264 *** | −0.006 | −0.229 ** |
(−3.79) | (−0.58) | (−0.20) | (−4.02) | (−0.08) | (−2.71) | |
AGE | −0.038 *** | −0.031 *** | −0.028 *** | −0.037 *** | −0.034 *** | −0.024 *** |
(−3.23) | (−3.37) | (−3.29) | (−4.65) | (−3.28) | (−3.49) | |
SIZE | −0.001 ** | −0.002 *** | 0.001 * | 0.002 *** | 0.002 *** | 0.001 ** |
(−2.48) | (−6.19) | (1.88) | (5.94) | (3.86) | (2.37) | |
ROA | −0.087 *** | −0.082 *** | 0.094 *** | 0.079 *** | 0.092 *** | 0.075 *** |
(−3.12) | (−2.61) | (3.60) | (3.04) | (3.31) | (3.54) | |
LEV | −0.060 *** | −0.056 *** | −0.062 *** | −0.057 *** | −0.074 *** | −0.032 *** |
(−5.08) | (−3.32) | (−2.91) | (−3.66) | (−3.18) | (−4.06) | |
CFO | −0.040 *** | −0.035 *** | 0.053 *** | 0.030 *** | 0.042 *** | 0.032 *** |
(−5.94) | (−6.17) | (6.79) | (5.65) | (6.95) | (5.52) | |
GROW | 0.000 | 0.004 *** | 0.002 | 0.003 ** | 0.001 | 0.004 *** |
(0.13) | (3.15) | (1.05) | (2.46) | (0.86) | (3.10) | |
TBQ | 0.004 *** | 0.006 *** | 0.005 *** | 0.005 *** | 0.005 *** | 0.005 *** |
(2.62) | (3.12) | (3.55) | (3.06) | (7.36) | (5.13) | |
LARST | −0.035 *** | −0.039 *** | −0.034 *** | −0.040 *** | −0.035 *** | −0.032 *** |
(−2.61) | (−3.06) | (−5.23) | (−7.69) | (−3.33) | (−3.58) | |
COMP | 0.021 *** | 0.019 *** | 0.021 *** | 0.020 *** | 0.020 *** | 0.021 *** |
(3.72) | (3.86) | (4.46) | (6.39) | (3.66) | (4.46) | |
DUAL | 0.006 *** | 0.007 *** | 0.005 *** | 0.007 *** | 0.005 *** | 0.002 * |
(7.01) | (8.12) | (5.17) | (3.31) | (6.44) | (1.72) | |
Constant | 0.084 *** | 0.098 *** | 0.053 *** | 0.104 *** | 0.105 *** | 0.017 |
(3.01) | (5.14) | (3.84) | (4.46) | (3.16) | (1.51) | |
Observations | 10,676 | 10,768 | 6650 | 14,794 | 13,213 | 8231 |
R-squared | 0.219 | 0.269 | 0.236 | 0.244 | 0.225 | 0.178 |
Variables | (1) | (2) | (3) | (4) | (5) | (6) |
---|---|---|---|---|---|---|
No Political Connection | Political Connection Present | Low Audit Quality | High Audit Quality | Low Institutional Ownership | High Institutional Ownership | |
Corr | −0.107 * | −0.214 *** | −0.279 *** | −0.081 * | −0.214 *** | −0.001 |
(−1.57) | (−4.47) | (−3.32) | (−1.17) | (−4.31) | (−0.54) | |
AGE | −0.037 *** | −0.030 *** | −0.035 *** | −0.020 *** | −0.043 *** | −0.025 *** |
(−3.97) | (−5.16) | (−6.80) | (−5.78) | (−3.75) | (−2.74) | |
SIZE | 0.001 *** | 0.003 *** | 0.002 *** | 0.001 | −0.000 | −0.002 *** |
(3.41) | (6.06) | (5.66) | (0.61) | (−0.60) | (−6.49) | |
ROA | 0.076 *** | 0.094 *** | 0.083 *** | 0.073 *** | −0.097 *** | −0.056 *** |
(3.32) | (3.29) | (4.83) | (3.28) | (−3.66) | (−3.32) | |
LEV | −0.061 *** | −0.052 *** | −0.060 *** | −0.035 *** | −0.079 *** | −0.034 *** |
(−4.88) | (−2.07) | (−3.97) | (−5.97) | (−5.50) | (−3.13) | |
CFO | 0.040 *** | 0.029 *** | 0.036 *** | 0.045 *** | −0.037 *** | −0.033 *** |
(4.20) | (4.19) | (7.85) | (2.95) | (−5.37) | (−6.16) | |
GROW | 0.002 | 0.003 ** | 0.002 ** | 0.003 | 0.000 | 0.003 *** |
(1.48) | (2.45) | (2.25) | (0.76) | (0.10) | (2.61) | |
TBQ | 0.005 *** | 0.006 *** | 0.005 *** | 0.006 *** | 0.005 *** | 0.005 *** |
(6.85) | (4.31) | (3.24) | (6.24) | (5.46) | (6.54) | |
LARST | −0.039 *** | −0.036 *** | −0.036 *** | −0.047 *** | −0.023 *** | −0.029 *** |
(−6.41) | (−2.60) | (−8.65) | (−9.00) | (−3.03) | (−4.52) | |
COMP | 0.019 *** | 0.021 *** | 0.021 *** | 0.019 *** | 0.023 *** | 0.017 *** |
(4.46) | (3.16) | (8.76) | (7.37) | (3.87) | (3.92) | |
DUAL | 0.007 *** | 0.005 *** | 0.006 *** | 0.013 *** | 0.007 *** | 0.003 *** |
(9.12) | (4.53) | (9.60) | (5.52) | (7.80) | (4.07) | |
Constant | 0.099 *** | 0.087 *** | 0.095 *** | −0.016 | 0.075 *** | 0.074 *** |
(3.22) | (4.56) | (4.61) | (−0.66) | (5.48) | (8.11) | |
Observations | 14,461 | 6983 | 20,201 | 1243 | 10,713 | 10,731 |
R-squared | 0.242 | 0.241 | 0.236 | 0.276 | 0.234 | 0.197 |
Variables | (1) | (2) |
---|---|---|
First | Second | |
MCorr | 0.823 *** | |
(7.86) | ||
Corr | −2.727 *** | |
(−6.32) | ||
Controls | YES | YES |
FIRM/YEAR | YES | YES |
Constant | −0.009 ** | 0.111 |
(−2.11) | (0.01) | |
Observations | 21,444 | 21,444 |
Variables | Unmatched | Mean | % Bias | t-Test | ||
---|---|---|---|---|---|---|
Matched | Treated | Control | t-Value | p-Value | ||
SIZE | U | 22.133 | 22.434 | −3.500 | −3.190 | 0.000 |
M | 22.133 | 22.171 | −2.900 | −2.440 | 0.015 | |
ROA | U | 0.043 | 0.039 | 2.000 | 2.130 | 0.000 |
M | 0.043 | 0.044 | −0.400 | −0.250 | 0.803 | |
GROW | U | 0.114 | 0.148 | −1.900 | −0.950 | 0.000 |
M | 0.114 | 0.112 | 0.600 | 0.480 | 0.633 | |
TBQ | U | 2.103 | 1.935 | 2.900 | 1.420 | 0.000 |
M | 2.101 | 2.123 | −1.700 | −1.210 | 0.226 | |
AGE | U | 3.170 | 3.166 | 2.100 | 1.540 | 0.124 |
M | 3.170 | 3.172 | −1.000 | −0.700 | 0.486 | |
LEV | U | 0.416 | 0.432 | −2.100 | −1.950 | 0.000 |
M | 0.416 | 0.419 | −1.600 | −1.210 | 0.225 | |
CFO | U | 0.052 | 0.046 | 1.300 | 1.540 | 0.000 |
M | 0.052 | 0.054 | −1.900 | −1.360 | 0.174 |
Variables | (1) | (2) |
---|---|---|
Ols | Psm_Ols | |
Corr | −0.297 *** | −0.300 *** |
(−3.23) | (−4.46) | |
AGE | −0.034 *** | −0.033 *** |
(−2.73) | (−5.12) | |
SIZE | 0.002 *** | 0.003 *** |
(3.24) | (6.15) | |
ROA | 0.083 *** | 0.080 *** |
(5.30) | (6.91) | |
LEV | −0.058 *** | −0.059 *** |
(−4.61) | (−4.33) | |
CFO | 0.037 *** | 0.035 *** |
(3.66) | (5.04) | |
GROW | 0.002 ** | 0.002 |
(2.53) | (1.25) | |
TBQ | 0.005 *** | 0.004 *** |
(3.05) | (7.17) | |
LARST | −0.038 *** | −0.038 *** |
(−3.40) | (−3.42) | |
COMP | 0.020 *** | 0.024 *** |
(3.65) | (4.24) | |
DUAL | 0.007 *** | 0.008 *** |
(3.65) | (6.60) | |
Constant | 0.094 *** | 0.088 *** |
(3.43) | (6.59) | |
Observations | 21,444 | 21,444 |
FIRM/YEAR | YES | YES |
Variables | Full Sample (OLS) | Sample Excluding Companies with no R&D Activity (OLS) | ||
---|---|---|---|---|
(1) | (2) | (3) | (4) | |
RDOUT | RDOUT | RDOUT | RDOUT | |
Corr | −0.657 *** | −0.519 *** | −0.689 *** | −0.830 *** |
(−7.89) | (−6.09) | (−3.14) | (−3.28) | |
AGE | −2.223 *** | −0.793 *** | ||
(−6.15) | (−5.70) | |||
SIZE | 0.021 | 0.415 *** | ||
(1.04) | (2.80) | |||
ROA | 1.531 *** | 1.183 *** | ||
(4.15) | (3.43) | |||
LEV | −0.853 *** | −0.072 | ||
(−7.45) | (−0.68) | |||
CFO | 0.488 | 0.177 | ||
(1.64) | (0.62) | |||
GROW | 0.135 ** | 0.087 | ||
(3.26) | (1.47) | |||
TBQ | −0.026 * | 0.010 | ||
(−1.75) | (0.72) | |||
LARST | −1.165 *** | −0.208 * | ||
(−9.26) | (−1.85) | |||
COMP | 0.617 *** | 0.897 *** | ||
(8.86) | (4.12) | |||
DUAL | 0.247 *** | 0.210 *** | ||
(5.89) | (6.10) | |||
Constant | 2.351 *** | 5.759 *** | 4.767 *** | −7.483 *** |
(3.16) | (3.25) | (4.52) | (−6.10) | |
Observations | 21,444 | 21,444 | 10,504 | 10,504 |
FIRM/YEAR | NO | YES | NO | YES |
Variables | Tobit Regression | Poisson Regression | Negative Binomial Regression | |||
---|---|---|---|---|---|---|
(1) | (2) | (3) | (4) | (5) | (6) | |
RDIN | RDIN | RDOUT | RDOUT | RDOUT | RDOUT | |
Corr | −0.402 *** | −0.300 *** | −0.272 *** | −0.216 *** | −0.284 *** | −0.215 *** |
(−5.66) | (−2.74) | (−3.62) | (−3.29) | (−5.44) | (−4.00) | |
AGE | −0.046 *** | −0.905 *** | −0.996 *** | |||
(−3.61) | (−4.74) | (−3.63) | ||||
SIZE | 0.002 *** | 0.012 ** | 0.015 | |||
(4.77) | (2.30) | (1.19) | ||||
ROA | 0.090 *** | 0.626 *** | 0.623 *** | |||
(4.43) | (6.67) | (2.63) | ||||
LEV | −0.071 *** | −0.408 *** | −0.526 *** | |||
(−3.09) | (−3.78) | (−6.98) | ||||
CFO | 0.036 *** | 0.222 *** | 0.252 | |||
(7.03) | (2.89) | (1.28) | ||||
GROW | 0.003 *** | 0.056 *** | 0.071 * | |||
(2.58) | (3.76) | (1.74) | ||||
TBQ | 0.005 *** | −0.014 *** | −0.024 ** | |||
(2.72) | (−3.59) | (−2.44) | ||||
LARST | −0.047 *** | −0.503 *** | −0.493 *** | |||
(−2.85) | (−5.60) | (−6.26) | ||||
COMP | 0.022 *** | 0.259 *** | 0.299 *** | |||
(8.69) | (4.59) | (6.70) | ||||
DUAL | 0.008 *** | 0.097 *** | 0.105 *** | |||
(3.15) | (9.59) | (4.13) | ||||
Constant | 0.034 *** | 0.115 *** | 0.853 *** | 2.127 *** | 0.853 *** | 2.160 *** |
(8.95) | (3.17) | (9.33) | (6.52) | (7.54) | (6.68) | |
Observations | 21,444 | 21,444 | 21,444 | 21,444 | 21,444 | 21,444 |
FIRM/YEAR | NO | YES | NO | YES | NO | YES |
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Bai, M.; Chen, Y.; Hong, Y.; Yang, Z. A Study of the Impact of Executive Corruption on Corporate Innovation. Systems 2024, 12, 25. https://doi.org/10.3390/systems12010025
Bai M, Chen Y, Hong Y, Yang Z. A Study of the Impact of Executive Corruption on Corporate Innovation. Systems. 2024; 12(1):25. https://doi.org/10.3390/systems12010025
Chicago/Turabian StyleBai, Ming, Yanru Chen, Ye Hong, and Zhongqi Yang. 2024. "A Study of the Impact of Executive Corruption on Corporate Innovation" Systems 12, no. 1: 25. https://doi.org/10.3390/systems12010025