{"title":"Administrative monopoly and state-owned enterprise innovation: Evidence from the fair competition review system in China","authors":"","doi":"10.1016/j.irfa.2024.103463","DOIUrl":null,"url":null,"abstract":"<div><p>This study examines the impact of administrative monopoly on corporate innovation, specifically focusing on the Fair Competition Review System (FCRS) implemented in China. Based on Chinese A-share listed firms from 2012 to 2020, we use the implementation of the FCRS as a natural experiment to conduct a difference-in-difference test. Our findings show that the FCRS significantly increases the level of innovation among SOEs through the mechanisms of resource acquisition and market competition. The incentive effect is not only at the strategic innovation level but also promotes the improvement of the substantive innovation level of SOEs. The heterogeneity test indicates that improvements stemming from the FCRS are more pronounced in specific functional categories, regions with poor business environments, and state-owned enterprises in industries that receive key policy support. Finally, our study also reveals that the FCRS promotes the input-output efficiency of innovation among SOEs. This research contributes to the literature by filling the research gap on the impact of administrative monopoly on corporate innovation, providing novelty evidence on the economic consequences of regulatory administrative monopoly, and offering policy insights regarding the FCRS.</p></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":null,"pages":null},"PeriodicalIF":7.5000,"publicationDate":"2024-07-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Review of Financial Analysis","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1057521924003958","RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
This study examines the impact of administrative monopoly on corporate innovation, specifically focusing on the Fair Competition Review System (FCRS) implemented in China. Based on Chinese A-share listed firms from 2012 to 2020, we use the implementation of the FCRS as a natural experiment to conduct a difference-in-difference test. Our findings show that the FCRS significantly increases the level of innovation among SOEs through the mechanisms of resource acquisition and market competition. The incentive effect is not only at the strategic innovation level but also promotes the improvement of the substantive innovation level of SOEs. The heterogeneity test indicates that improvements stemming from the FCRS are more pronounced in specific functional categories, regions with poor business environments, and state-owned enterprises in industries that receive key policy support. Finally, our study also reveals that the FCRS promotes the input-output efficiency of innovation among SOEs. This research contributes to the literature by filling the research gap on the impact of administrative monopoly on corporate innovation, providing novelty evidence on the economic consequences of regulatory administrative monopoly, and offering policy insights regarding the FCRS.
期刊介绍:
The International Review of Financial Analysis (IRFA) is an impartial refereed journal designed to serve as a platform for high-quality financial research. It welcomes a diverse range of financial research topics and maintains an unbiased selection process. While not limited to U.S.-centric subjects, IRFA, as its title suggests, is open to valuable research contributions from around the world.