Endogeneity and the Dynamics of Corporate Governance and Innovation in India’s Manufacturing Sector

Q2 Business, Management and Accounting

Business Perspectives and Research Pub Date : 2023-05-19 DOI:10.1177/22785337221148580

Ishfaq Gulzar, Azhar Imtiyaz Bisati, S. I. Haque

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引用次数: 2

Abstract

This article presents the System Generalized Method of Moments (SGMM) results on the empirical association between innovation and corporate governance for a panel data set of 88 manufacturing companies in India listed on the NSE 200 Index from 2014 to 2020. GMM approach controls the potential sources of endogeneity inherent in the innovation—corporate governance relationship which mainly arises due to unobserved heterogeneity and simultaneity bias. We empirically analyze corporate governance and innovation to understand the market value of research and development practices of manufacturing companies in India. Our results indicate that Board size, Board meetings, and CEO duality support the “value creation” hypothesis of corporate governance of manufacturing companies in India. However, ownership concentration and Board meeting contradict “value creation hypotheses.” Therefore, this study identifies various factors of corporate governance that can help manufacturing companies in India in innovation and growth options. Further, this study recommends that ownership concentration and Board meetings should be properly assessed, as the concentrated owners should not merely act as expropriates, but rather should enable the long-term sustainability of the firm by taking the initiative, which enhances growth.

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印度制造业公司治理与创新的内生性与动态

本文介绍了2014年至2020年在NSE 200指数上上市的印度88家制造业公司的面板数据集的创新与公司治理之间实证关联的系统广义矩方法（SGMM）结果。GMM方法控制了创新中固有的内生性的潜在来源——公司治理关系，这种关系主要是由于未观察到的异质性和同时性偏差而产生的。我们实证分析了公司治理和创新，以了解印度制造业公司研发实践的市场价值。我们的研究结果表明，董事会规模、董事会会议和CEO双重性支持印度制造业公司治理的“价值创造”假说。然而，所有权集中和董事会会议与“价值创造假设”相矛盾。因此，本研究确定了公司治理的各种因素，这些因素可以帮助印度的制造业公司选择创新和增长。此外，这项研究建议，所有权集中度和董事会会议应得到适当评估，因为集中的所有者不应仅仅充当被征用者，而是应通过采取主动来促进公司的长期可持续性，从而促进增长。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Business Perspectives and Research Business, Management and Accounting-Business and International Management

CiteScore

5.00

自引率

0.00%

发文量

期刊介绍： Business Perspectives and Research (BPR) aims to publish conceptual, empirical and applied research. The empirical research published in BPR focuses on testing, extending and building management theory. The goal is to expand and enhance the understanding of business and management through empirical investigation and theoretical analysis. BPR is also a platform for insightful and theoretically strong conceptual and review papers which would contribute to the body of knowledge. BPR seeks to advance the understanding of for-profit and not-for-profit organizations through empirical and conceptual work. It also publishes critical review of newly released books under Book Review section. The aim is to popularize and encourage discussion on ideas expressed in newly released books connected to management and allied disciplines. BPR also periodically publishes management cases grounded in theory, and communications in the form of research notes or comments from researchers and practitioners on published papers for critiquing and/or extending thinking on the area under consideration. The overarching aim of Business Perspectives and Research is to encourage original/innovative thinking through a scientific approach.