External Resource Provision and High-Quality Innovation : Evidence on Private Managerial Myopia Under Reverse Mixed-Ownership Reform in China

Chinese privately-owned enterprises (POEs) play critical roles in the Chinese economy, but they are ‘resource cursed’. Moreover, managerial myopia is particularly serious. Using a sample of POEs from 2008–2020, this paper finds that managerial myopia is inversely related to innovation performance. State ownership stimulates innovation for POEs; however, it inhibits innovation performance due to managerial myopia. In addition, government subsidies negatively moderate the relationship between managerial myopia and high-quality innovation under the reform, whereas tax incentives positively moderate the relationship. Additional analyses indicate that a reduction in financing costs induces high-quality innovation for POEs