Corporate governance structure, financial capability, and the R&D intensity in Chinese sports sector: Evidence from listed sports companies

Gang Chen, James J. Zhang, N. David Pifer

Research output: Contribution to journalArticle

2 Scopus citations

Abstract

Innovations are the foundation of an enterprise's sustainable development, which is particularly important for sports firms in an evolving Chinese sport industrial environment. Analyzing publicly-listed sports firms on The New Third Board (NTB) in China, this study examined the influence of corporate financial capability and corporate governance structure on firms' R&D intensity through a series of multiple regression models. Findings revealed that corporate financial capability is an important determinant of R&D intensity, and corporate governance structure has a small but meaningful effect on R&D intensity. Specifically, for Chinese sports firms, several financial capability indicators, such as return on equity, accounts receivable turnover, assets turnover, and profit growth rate, have positive relationships with R&D intensity; however, other financial capability indicators, such as leverage and cash flow, have negative relationships with R&D intensity. Limited evidence was found to support the notion that corporate governance significantly influences R&D intensity, although sports firms with good governance mechanisms are more likely to increase the positive effects of financial capabilities on R&D intensity while decreasing the negative effects. Discussions were centered on planning and executing R&D activities in sports companies.

Original languageEnglish
Article number6810
JournalSustainability (Switzerland)
Volume11
Issue number23
DOIs
StatePublished - Dec 1 2019

Keywords

  • Corporate financial capability
  • Corporate governance structure
  • Listed sports enterprises in new three-board in China
  • Policy effectiveness
  • R&D intensity

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