Three essays on innovation and agency-related issues

Chen, Yunxu (2023). Three essays on innovation and agency-related issues. University of Birmingham. Ph.D.

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Abstract

This thesis explores the impact of agency-related issues on innovation through internal corporate governance (antitakeover provisions), technological imitation, financial distress (debt violation), and government intervention in publicly traded firms in the United States. First, I use the instrumental variables method to verify the value creation hypothesis that antitakeover provisions (ATPs) foster innovation. I also discover that, while innovation increases firm value, ATPs decrease firm value. Second, I employ a stricter measurement of negative innovation quality by firm-level technological imitation constrained by rivals' forward and backward citations to find that greater firm-level ATPs promote technological imitation and support the moral hazard hypothesis. Furthermore, I reveal that bank involvement, such as debt violation, has a moderating effect on the quality and market value of innovation via technological imitation, indicating that a lower level of technological imitation would increase the quality and market value of innovation, but a higher frequency of debt violation would reduce this positive effect due to the fear of losing innovation input. Third, the quality of innovation in government is higher than in corporate patents because stronger government control and monitoring result in more original and general innovations without the pressure of market myopia. However, the negative effect of technological imitation on innovation quantity would be more pronounced in firms receiving R&D subsidies because of managerial risk-taking.

Type of Work:

Thesis (Doctorates > Ph.D.)

Award Type:

Doctorates > Ph.D.

Supervisor(s):