The Impact of the Social Relationship between CEO and Independent Director on the R&D in Chinese Listed Companies ()
ABSTRACT
Relationship culture is one of the important
characteristics of China’s social culture, and has an impact on financial decision-making for Chinese
listed companies. Independent directors as the company’s external supervisors
play an important supervisory role. However, it is common for independent
directors to become ornamental directors. CEO’s social relationship is an
important factor affecting the source of independent directors. Now there is
little literature to discuss the impact of this social relationship on R&D.
This paper empirically tests the impact on R&D of
the relationship between CEO and independent director in Chinese A-share listed
companies. The results show that the social relationship between CEO and
independent directors can promote the R&D and the social relationship between
CEO and independent directors has a more significant impact on R&D for
non-SOE, low level of corporate governance, tight financing constraints in
Chinese listed companies. Therefore, the conclusion of this paper provides
a unique view for the discussion of the governance role of independent
directors in theory and the impact of social networks on decision-making in Chinese Listed Companies and
provides a reference for improving the independent director institutions in
practice.
Share and Cite:
Sun, D. , Lin, Y. and Ye, Z. (2022) The Impact of the Social Relationship between CEO and Independent Director on the R&D in Chinese Listed Companies.
Modern Economy,
13, 1066-1089. doi:
10.4236/me.2022.138056.
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