Making of an innovative economy: a study of diversity of Chinese enterprise innovation
China Finance Review International
ISSN: 2044-1398
Article publication date: 14 July 2021
Issue publication date: 19 July 2022
Abstract
Purpose
This research examines the effects of firm ownership and size on innovation capability using data from the World Bank China Enterprise Survey (WBCES), which provides directly measurable innovation-related variables. Key consideration is given to the role and innovation capability of state-owned enterprises (SOEs) compared with domestic and foreign private enterprises in the Chinese economy.
Design/methodology/approach
In its quest for technological self-reliance and a new developmental path, China is focusing on its enterprise innovation capability.
Findings
The findings suggest that SOEs and domestic private enterprises are similar in terms of innovation participation but differ in terms of innovation diversification, which implies ownership-specific innovative advantages. In general, the authors find that SOEs are more innovative with respect to processes innovation but less so with respect to product, management and promotion innovations. Foreign-owned enterprises are superior in all types of innovation except product innovation.
Research limitations/implications
The authors also find that size is an important determinant of innovation capability, with the effect varying depending on location and industry. Moreover, the joint effect of firm ownership and size on innovation declines with increasing size. These findings provide new insights into the evaluation of China's major policies.
Originality/value
This research examines the effects of ownership and size on enterprise innovation capability, using the WBCES (2013) data, which include direct measurable innovation related variables.
Keywords
Acknowledgements
The authors acknowledge the support of Xi'an Jiaotong- Liverpool University's Research Enhancement Fund (REF-18-01-06) and Tsinghua University Research Fund. The authors would like to thank Yujie Shi for her able research assistance. Last but not the least, the authors would like to thank Professor Wenfeng Wu, Editor in Chief and two anonymous referees of China Finance Review International for their valuable and insightful comments, which improved the quality of the paper.
Citation
Salike, N., Huang, Y., Yin, Z. and Zeng, D.Z. (2022), "Making of an innovative economy: a study of diversity of Chinese enterprise innovation", China Finance Review International, Vol. 12 No. 3, pp. 496-518. https://doi.org/10.1108/CFRI-10-2020-0135
Publisher
:Emerald Publishing Limited
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