Does Accountability for Illegal Operation and Investment Affect the Quality and Efficiency of Innovation in SOEs? Evidence from China
Abstract
This paper intends to explore whether accountability for illegal operation and investment (AIOI) influences the quality and efficiency of innovation in SOEs. Using Chinese A-share listed firms as the sample, we find that AIOI can improve the quality of internal control, alleviate managerial myopia, improve capital allocation efficiency, and thereby enhance innovation output and innovation efficiency in SOEs. Heterogeneity analysis finds that the impact of AIOI on corporate innovation is mainly reflected in companies with high media attention, areas with severe government intervention, and companies with young executives. Further, we find that AIOI promotes SOEs to favour high-quality innovation activities.
Fields of Study & Subjects
Corporate Finance and Governance
Corporate Governance and Financial Management
Auditing
Earnings Management
Governance
Publication details
- Journal / source
- Applied Economics
- Volume
- 58
- Issue
- 27
- Pages
- 5403–5416
- Publication date
- 30 January 2026
- Language
- EN