THE INFLUENCE OF SOCIAL CAPITAL, RISK TAKING AND CORPORATE GOVERNANCE ON INNOVATION INVESTMENT OF CHINESE LISTED FIRMS

Abstract

This research investigates the impact of social capital, corporate governance, and risk-
taking on the innovation investment of Chinese A- share listed companies. Defines and
operationalizes social capital across three dimensions: political capital, reputation capital, and
financial capital. It further explores the mediating effect of risk- taking on the relationship
between social capital and innovation investment. the study examines the boundary effect of
corporate governance structure on this relationship. Utilizes panel data of Chinese A- share
listed companies from 2018 to 2022. It employs PSM, Heckman two-stage evaluation model,
and GMM dynamic panel generalized moment model to test the direct and indirect effects of
social capital, the moderating effect of corporate governance, and the mediating effect of risk-
taking.
The findings reveal that social capital, corporate governance, and risk-taking all have a
significant positive impact on innovation investment. Furthermore, risk- taking plays a
mediating role in the relationship between social capital and innovation investment, while
corporate governance plays a moderating role. Offers theoretical and practical implications for
enterprises, policymakers, and researchers. It provides valuable insights for enterprises seeking
to leverage social capital and improve corporate governance to enhance innovation investment.
Additionally, it offers policymakers guidance on fostering an environment conducive to
innovation and entrepreneurship. Finally, the research contributes to the literature on social
capital, corporate governance, risk-taking, and innovation investment.