Management myopia and corporate innovation in China: Focus on the moderating role of equity incentives

Abstract

This study selected a sample of A-listed companies on the Shanghai and Shenzhen stock exchanges from 2010 to 2022 to examine the relationship between management myopia and corporate innovation. The findings are as follows. First, management myopia has an inhibiting effect on corporate innovation, whereas market competition significantly enhances such innovation. Second, equity incentives can alleviate the inhibiting effect of management myopia on corporate innovation by motivating managers to focus more on long-term development and innovation investments. Third, market competition has different impacts on innovation of companies with different levels of ownership. In this regard, its impact on companies with high equity concentration is more significant. Finally, market competition has different impacts on the innovation of state-owned and private enterprises, with a more significant impact on the latter.