Could Innovation Capital Impact on Firm Performance? Study by Panel Data Two Stage Regression with Board Composition

Abstract:

This paper found that the concepts of innovation capital are related to management performance, thereby supporting our hypothesis. Similar results are also obtained with two stage regression, which uses instrumental variables of corporate governance. The results demonstrate that independent directors have influence on innovation capital and management performance. This paper finds the coefficient of value-added innovation capital is negatively related to the grwth rate by return on assets and positively related to total production in two stages least square method. The results also show that Agency cost are reversal with innovation variables such as research and development expenditure are more accurate than personal contribution rate in measuring innovation capital. We therefore suggest a new measurement to estimate market performance using cross-sectional analysis, with the renew method to calculate the capital required to be redesigned.

• Periodical: Applied Mechanics and Materials (Volume 145)
• Pages: 430-435
• DOI: https://doi.org/10.4028/www.scientific.net/AMM.145.430
• Online since: December 2011
• Authors: Mu Shun Wang
• Keywords: Corporate Governance, Hausman Test, Innovation Capital, Two Stage Least Square, Weak-Instrument

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