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Abstract From the perspective of non-executive director, this study explores the impact of the supervisory effect of non-executive directors on firms’ technological innovation under the framework of principal-agent. The results show that non-executive directors of the board act as shareholder “speakers”, who have significant positive role in promoting enterprises’ technological innovation. However, the governance role of non-executive directors is restricted to some extent by the concentration of equity in enterprises and the power of management. In companies with higher equity concentration and greater management power, the positive impact of non-executive directors on corporate technology innovation is relatively low. The expansion test also finds that non-executive directors’ supervision and management’s equity incentives have complementary effects to jointly promote enterprise innovation, but due to the more concentrated ownership structure of Chinese private enterprises, the positive effect of non-executive directors on technological innovation is more obvious in state-owned enterprises.
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Received: 26 November 2018
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