What the study found
The study found that higher equity concentration was associated with lower enterprise value in China’s high-tech manufacturing sector. The negative relationship was weaker during the COVID-19 pandemic period, and it was strongest in capital-intensive subsectors such as aerospace and electronic equipment manufacturing.
Why the authors say this matters
The authors conclude that governance mechanisms and innovation dynamics can interact differently under major external shocks such as COVID-19. They also state that policymakers and corporate leaders should account for industry-specific attributes and macroeconomic conditions when designing ownership structures.
What the researchers tested
The researchers examined listed high-tech manufacturing firms in China from 2019 to 2023 using a balanced panel of 642 firms. They used fixed-effects regression models and instrumental variable (IV) estimation to address endogeneity, and they also tested whether research and development (R&D) investment mediated the relationship between equity concentration and firm value.
What worked and what didn't
After correcting for endogeneity, equity concentration had a significantly larger negative effect on firm value than ordinary least squares (OLS) estimates suggested, with an IV estimate of β = −13.105 (p < 0.01). Traditional mediation analysis suggested that R&D investment partially explained 18–23% of the total effect, but IV-based mediation tests found statistically insignificant indirect effects.
What to keep in mind
The abstract says the mediation results are sensitive to endogeneity correction. It also notes that the negative association varies by industry segment and was attenuated during the pandemic; other limitations are not described in the available summary.
Key points
- Higher equity concentration was linked to lower firm value in China’s high-tech manufacturing sector.
- The negative effect was weaker during the COVID-19 period.
- The effect was strongest in capital-intensive subsectors, including aerospace and electronic equipment manufacturing.
- R&D investment appeared to mediate 18–23% of the total effect in traditional mediation analysis.
- IV-based mediation tests found no statistically significant indirect effect.
- OLS estimates were described as downward biased compared with IV estimates.
Disclosure
- Research title:
- Equity concentration reduced firm value in China’s high-tech manufacturing sector
- Authors:
- Jie Yao, Qingtian Jiang
- Institutions:
- Jilin Electric Power Research Institute (China), Northeast Electric Power University, Northeast Electric Power University
- Publication date:
- 2026-03-29
- OpenAlex record:
- View
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