Influence of equity structure in China’s high-tech manufacturing industry on enterprise value under epidemic shocks

Why who owns a company matters in a crisis

The COVID-19 pandemic did more than disrupt daily life; it acted like a global stress test for how companies are owned and run. This study asks a simple but important question: when a few big shareholders hold most of a company’s stock in China’s high-tech manufacturing sector, does that make the company stronger or weaker in turbulent times? By tracking 642 listed firms from 2019 to 2023, the authors show how ownership concentration, innovation spending, and industry context interact to shape company value during and after the pandemic.

What the researchers set out to explore

High-tech manufacturing—ranging from pharmaceuticals and aerospace to electronics—relies heavily on long-term research and development, large capital outlays, and the confidence of investors. Classic theories say concentrated ownership can be good because large shareholders keep managers in check and bring key resources. But other views warn that dominant owners may squeeze out minority investors, cut risky innovation projects, or favor short-term gains over long-term health. The pandemic, as a sudden external shock, offered a real-world test of which effect dominates, and whether research spending serves as a bridge between ownership structure and firm value.

How the study measured value and control

To capture company value, the authors used Tobin’s Q, a standard market-based indicator that compares what investors think a firm is worth to the cost of its assets. They measured ownership concentration mainly by the share held by the largest shareholder and, in checks, by the combined stake of the top five shareholders. They also tracked research and development (R&D) spending, firm size, growth, debt levels, and profitability. Using data from 2019 to 2023 on Shanghai and Shenzhen A-share high-tech manufacturers, they built statistical models that control for differences between firms and corrected for hidden biases by using ownership patterns in the rest of the industry as an instrumental variable.

What the numbers revealed about ownership and value

The core finding is stark: companies where ownership was more concentrated were, on average, valued lower by the market. When the authors used advanced methods to strip out distortion from hidden factors, the negative impact of concentration became much larger than it first appeared. This suggests that simple analyses understate how harmful excessive control by a few shareholders can be. At the same time, the study did not find reliable evidence for a “sweet spot” where concentration first helps and then hurts; instead, the relationship during this crisis period looked roughly like a straight downward line—more concentration, lower value.

Innovation spending: a suspected but fragile bridge

Because innovation is central to high-tech success, the authors examined whether ownership concentration undermines value partly by squeezing R&D budgets. Traditional step-by-step tests showed a plausible chain: higher concentration coincided with lower R&D spending, and higher R&D was tied to higher firm value. Under these methods, about one-fifth of the damage from concentrated ownership seemed to pass through reduced research investment. However, when the researchers applied stricter causal tools that correct for hidden biases in both ownership and R&D, the mediating effect lost statistical support. Economically, R&D still looked important, but the data could not firmly prove it as a causal bridge rather than a byproduct of other forces like risk aversion or funding strains.

How the pandemic and industry type shaped outcomes

The crisis did not affect all firms equally. Before COVID-19, concentrated ownership tended to drag down value. During the pandemic years, that negative effect became noticeably weaker, suggesting that tight control can also bring faster decisions and more coordinated responses when uncertainty is extreme. The pattern also differed sharply across subsectors. Capital-heavy fields such as aerospace and electronic equipment, where projects are large and cycles are long, showed the strongest harm from concentrated ownership. In contrast, pharmaceutical and precision instrument makers—where patents, know-how, and specialized talent drive value—showed little direct link between who owns how much and how the market values the firm.

What this means for companies and policymakers

In plain terms, the study concludes that letting a small group of shareholders dominate China’s high-tech manufacturers generally lowers market value, especially in normal times, and that the main damage does not consistently run through research spending alone. Yet in a severe shock like COVID-19, some of the drawbacks of concentration are softened by the benefits of swift, unified control. For business leaders and regulators, the message is that there is no one-size-fits-all ownership model. Optimal structures depend on whether times are calm or turbulent, and on whether an industry’s value rests more on heavy equipment or on intangible assets like ideas and expertise.

Citation: Yao, J., Jiang, Q. Influence of equity structure in China’s high-tech manufacturing industry on enterprise value under epidemic shocks. Sci Rep 16, 10695 (2026). https://doi.org/10.1038/s41598-026-46108-6

Keywords: equity concentration, high-tech manufacturing, corporate value, COVID-19 pandemic, R&D investment