Thesis

Corporate and green innovation in China : an analysis of CEO overconfidence, equity incentives, and political connections

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Awarding institution
  • University of Strathclyde
Date of award
  • 2026
Thesis identifier
  • T18023
Person Identifier (Local)
  • 201988288
Qualification Level
Qualification Name
Department, School or Faculty
Abstract
  • Corporate innovation is a critical engine for economic growth and firm sustainability. Within transitional economies such as China, its determinants are shaped by distinctive institutional features and the evolving interaction between market mechanisms and state influence. This thesis examines the drivers of innovation among Chinese listed firms through three complementary empirical studies on executive beliefs, internal incentive design, and political embeddedness. The first two studies analyse general corporate innovation, while the third focuses on green innovation, a policy-sensitive form of innovation that has become increasingly important during China’s green transition. The first study develops a holdings-based revealed-beliefs proxy of CEO overconfidence adapted to Chinese data by extending the intuition of the Holder 67 measure. It shows that CEO overconfidence is positively associated with patent citation outcomes, with a stronger association in state-owned enterprises, while the moderating effect of CEO duality is concentrated in utility model patent citations. The second study examines whether equity incentives promote innovation among Chinese listed companies following the 2006 regulatory reforms. It finds a significant positive association between equity incentives and corporate innovation. Option-based instruments are more strongly associated with higher-value invention outcomes, incentives targeted at core technical and business personnel are more effective than those targeted at executives, and the positive relation is stronger in non-state-owned firms and technology-intensive industries. The third study shifts the focus to green innovation and analyses how CEO political connections and local officials’ promotion incentives jointly shape green innovation in Chinese private listed firms. The evidence shows that political connections significantly increase green invention patent output, while their effect on green utility model innovation is weaker and statistically insignificant. This positive effect is more pronounced in lower-level cities, in regions with stricter environmental regulation, and among heavily polluting firms, and it is further strengthened when mayoral promotion incentives are stronger in quasi-sub-provincial and ordinary prefecture-level cities.
Advisor / supervisor
  • Tang, Leilei
  • Zhang, Hai
Resource Type
DOI
Date Created
  • 2025

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