What the study found
Equity concentration in China’s high-tech manufacturing firms was associated with lower firm value, and the negative effect was larger after the authors adjusted for endogeneity using instrumental variables (a method used to reduce bias from non-random relationships). The study also found that the negative effect was weaker during the pandemic period.
Why the authors say this matters
The authors conclude that the findings add to understanding of how corporate governance and innovation interact under major external shocks such as COVID-19. They also suggest that policymakers and corporate leaders should consider industry-specific features and broader economic conditions when designing ownership structures.
What the researchers tested
The researchers analyzed a balanced panel of 642 listed firms in China’s high-tech manufacturing sector from 2019 to 2023. They used fixed-effects regression models and instrumental variable estimation, and they examined R&D investment (research and development spending) as a possible mediator between equity concentration and firm value.
What worked and what didn't
After correcting for endogeneity, the instrumental variable estimate showed a significantly negative effect of equity concentration on firm value (β = −13.105, p < 0.01), larger than the ordinary least squares result. Traditional mediation analysis suggested R&D investment partially mediated the relationship, accounting for 18–23% of the total effect, but instrumental variable–based mediation tests found the indirect effects were not statistically significant.
What to keep in mind
The abstract does not describe additional limitations beyond the sensitivity of the mediation results to endogeneity correction. The findings are limited to China’s listed high-tech manufacturing firms over 2019–2023 and the subsectors mentioned in the abstract.
Key points
- Equity concentration was linked to lower firm value in China’s high-tech manufacturing sector.
- The negative association was stronger after instrumental variable estimation than in ordinary least squares results.
- Traditional mediation analysis suggested R&D investment explained 18–23% of the total effect.
- Instrumental variable–based mediation tests found no statistically significant indirect effect through R&D investment.
- The negative effect of equity concentration was attenuated during the pandemic period.
- The effect was strongest in capital-intensive subsectors such as aerospace and electronic equipment manufacturing.
Disclosure
- Research title:
- Equity concentration lowered firm value in China’s high-tech manufacturing
- Authors:
- Jie Yao, Qingtian Jiang
- Institutions:
- Northeast Electric Power University, Jilin Electric Power Research Institute (China)
- Publication date:
- 2026-03-29
- OpenAlex record:
- View
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