Controlling Shareholders and Innovation: Evidence From Trademark Registrations

초록

We examine how controlling shareholders influence corporate innovation, using trademark registration data from Chinese listed firms between 2003 and 2020. We find that the effect of control depends on the nature of the controlling entity: in state-owned enterprises (SOEs), government control is associated with significantly lower levels of innovation output, whereas in non-SOEs, greater authoritative power of the controlling shareholder is positively associated with innovation. Our findings suggest that institutional investors may help mitigate agency problems related to innovation in SOEs, although their role is limited in non-SOEs. Additional analyses reveal that trademarks are positively linked to future firm performance and that controlling shareholder authority is positively associated with innovation efficiency. Our findings underscore the importance of ownership structure in shaping firms' innovation strategies and outcomes.

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