Corporate ownership and firm performance: a mediating role of innovation efficiency

• Published in: Economics of innovation and new technology Vol. 31; no. 4; pp. 292 - 319
• Main Authors: Wu, Tai-Hsi, Ting, Pei Ju Lucy, Lin, Mei-Chen, Chang, Chia-Chi
• Format: Journal Article
• Language: English
• Published: Abingdon Routledge 19.05.2022; Taylor & Francis Ltd
• Subjects: Commercialization; Corporate governance; Corporate ownership; Data envelopment analysis; Efficiency; Electronics industry; firm performance; innovation efficiency; Innovations; mediator; Organizational performance; Ownership; R&D; Research & development
• ISSN: 1043-8599; 1476-8364
• DOI: 10.1080/10438599.2020.1799140

Using data from companies in Taiwan's electronics industry, this study examines the effect of corporate ownership on firm innovation efficiency and performance. We use a network-typed data envelopment analysis (DEA) approach to calculate firm-level innovation efficiency, which is composed of the R&D efficiency and the commercialization efficiency, respectively. We find that overall innovation efficiency is positively correlated with institutional ownership and directors' ownership. In addition, R&D efficiency is positively associated with ROA and commercialization efficiency positively correlates with Tobin's Q. R&D efficiency partially mediates the relationship between ownership-control deviation and ROA. However, commercialization efficiency plays a mediating role for institutional ownership on a firm's Tobin's Q. Our findings point to a bright side of the role of corporate governance in terms of its effects on corporate innovation and the effects of such innovation, in turn, on firm performance.