Corporate Governance, Innovation Capacity and Firm Performance Evidence from Chinese Listed Firms

This paper explores whether R&D investment has a mediating effect on the relationship between corporate governance and firm performance using unbalanced sample covering 11,634 Chinese listed firms. The study finds out the influence of corporate governance through innovation activities on firm performance. Specifically, the study found that ownership concentration and firm performance has been fully mediated by innovation investment. Similarly, debt financing, and product market competition were partially mediated by innovation investment of Chinese listed firms. This study adds comprehensive empirical evidence on the relationship of corporate governance and firm performance from the angle of R&D investment