Corporate governance, technological innovation, and corporate performance: Evidence from China

Corporate governance plays an important role in achieving high-quality economic development and sustainable corporate development. In recent years, as listed companies face increasing challenges in social responsibility issues such as environmental pollution and financial fraud, corporate governance has received widespread attention from academics and practitioners. In particular, technological innovation has attracted much attention to the development of enterprises. This paper also explores the intermediary mechanism of technological innovation based on the output measurement method of technological innovation. This study selected data from companies listed on the A-share main board of the Shanghai and Shenzhen Stock Exchanges in China from 2012 to 2022, aiming to explore the relationship between corporate governance and corporate performance. At the same time, we further analyzed the impact of corporate governance on corporate performance based on the mediating role of technological innovation. The research results show that equity balance degree, board size, and executive incentives all have a positive impact on corporate performance. Technological innovation has a certain mediating effect on independent variables (equity balance degree, board size, and executive incentives) and corporate performance. This study clarifies the controversy about the relationship between corporate governance and corporate performance and deepens the understanding of this relationship. It also provides empirical support for listed companies to pay attention to and improve corporate governance levels and enhance innovation capabilities. By exploring the interplay between governance mechanisms, innovation processes, and performance outcomes, researchers can gain a deeper understanding of how organizations can leverage governance practices to drive innovation-led growth and sustainable success.