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Cross-Firm Technological Linkages and Peer Effects on Corporate Governance

Kailin Zeng,Qianyun Zhong,Mengxue Liu,Wenqing Kuang

Published 2026 in Sustainability

ABSTRACT

This study extends the literature on peer effects by revealing that technological linkages drive cross-firm emulation of corporate governance practices, a core determinant of firms’ sustainable development capacity. Using a comprehensive sample of China’s A-share listed firms over the period 2004–2022, we document that R&D-intensive firms strategically extract governance insights from their technological peers. Our empirical analyses identify three distinct mechanisms underlying this governance emulation: information bridging, competitive isomorphism, and market feedback. Furthermore, this peer effect exhibits significant heterogeneity across firms with different corporate performance, R&D investment levels, and resource intensity. Notably, firms adopting peer-based governance practices experience a substantial improvement in financial performance, which reflects rational adaptation rather than blind herd behavior. Overall, this paper introduces technological peer relationship as a novel determinant of governance decisions and provides a micro-foundation for how firms optimize their governance arrangements to enhance long-term sustainable operation within technologically interdependent markets.

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