Government intervention, internal control, and technology innovation of SMEs in China

• DOI: 10.3389/fpsyg.2022.960025
• Publication Date: 2022-08-01T06:37:00Z
• Authors: Sun Ye; Sun Yi; Shao Fangjing; Qi Yuzhu
• Keywords: China; internal control quality; 9. Industry and infrastructure; 8. Economic growth; 0211 other engineering and technologies; Psychology; 02 engineering and technology; enterprise technology innovation; small and medium sized enterprises (SMEs); government intervention; BF1-990

Under the innovation-driven development strategy, the improvement of the core competitiveness of enterprises demonstrates increasing dependence on the ability of technological innovation. In this article, data of A-share listed companies in Shanghai and Shenzhen stock markets from 2008 to 2018 were selected as research samples for the analysis of the influencing factors and mechanism of enterprise technological innovation from the dual perspectives of the external economic environment and internal management system based on the use of the fixed-effect model. The results show that government intervention significantly hinders enterprises' investment in resources for technological innovation, and less government intervention can improve the innovation investment of enterprises. The intervention of internal control fails to bring institutional advantages; rather, it aggravates the negative effect of government intervention on enterprise technological innovation. The research enriches the existing academic research results on government intervention, internal control quality, and enterprise technological innovation. The findings provide experience for accelerating the marketization process in China, enterprise governance, and improving the level of enterprise technological innovation.