Alien merchant chambers and enterprise innovation: Evidence from China

Based on social capital theory, this paper aims to investigate the impact of member enterprises of alien merchant chambers on enterprise innovation, within A-share listed companies on the Shanghai and Shenzhen Stock Exchanges of China from 2010 to 2020. Additionally, the study seeks to explore the role played by social capital resulting from participation in these alien merchant chambers. Furthermore, we delve into the moderating effects of the number of alien merchant chambers and the degree of marketization in the enterprise's location. Moreover, we analyze the influence of heterogeneity in firm ownership and firm type. Our findings reveal that member enterprises of alien merchant chambers can increase their social capital and consequently promoting innovation; both the quantity of alien merchant chambers and the level of marketization in an enterprise's location positively influence this enhancement. Furthermore, the impact of state-owned enterprises and non-high-tech enterprises on enterprise innovation, following their engagement with alien merchant chambers, surpasses that of non-state-owned enterprises and high-tech enterprises. This research bridges the gap in understanding the corporate governance implications of alien merchant chambers, provides empirical evidence concerning Chinese alien merchant chambers, and addresses inquiries regarding the influence of merchant chambers' social capital. Additionally, it proposes a novel approach for listed companies to overcome resource constraints and to collaboratively pursue development, especially in light of the challenges posed by the COVID-19 pandemic.