Causality Between Board Features and Corporate Innovation Level: Empirical Evidence from Listed Companies in China

Under the condition of global economic recession after the pandemic of Covid-19, companies are seeking growth opportunities. Corporate innovation is an essential driver for the companies’ competitiveness. The paper takes the advantage of fixed effect linear regression model to analyze board features’ impact on firm innovation level. The model is based on the CSMAR database, a comprehensive research-oriented database focusing on China’s Finance and Economy to obtain the latest 10-year (2012–2022) annual firm-level R&D and individual-level board member characteristics data. The empirical result shows that a board with a larger proportion of independent directors, a larger board size, a higher financial background rate, larger average age, and a higher average degree tends to be innovation-centric. Furthermore, this paper dives deeper into the determinants of board gender diversity, which is an essential explanatory variable for company innovation. The result indicates that a board with a female chairman, a high oversea background rate, and a low multi-subject rate is often correlated with high gender diversity.