Effects of state-business collusion on corporate innovation and growth - Focusing on Chinese private enterprises*

Abstract

This study evaluated the effect of state-business collusion on the corporate innovation and growth of A-share private enterprises listed on the Shanghai Stock Exchange and the Shenzhen Stock Exchange in China. The results of this study showed that the state-business collusion of private enterprises inhibited corporate innovation and decreased their growth competence by increasing the unproductive expenditure and decreasing research and development costs. The results of this study are meaningful because it is the first study evaluating the effects of state-business collusion on corporate growth in terms of financial expense, which is the key element of corporate finance. © Rushing Water Publishers Ltd. 2019.