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A knowledge-based theory of the firm: managing innovation in biotechnology

Jin Chen (School of Economics and Management, Tsinghua University, Beijing, China)
Hao Jiao (Business School, Beijing Normal University, Beijing, China)
Xiaoting Zhao (School of Management, Zhejiang University, Hangzhou, China)

Chinese Management Studies

ISSN: 1750-614X

Article publication date: 4 April 2016



Based on the knowledge-based view (KBV), the purpose of this study is to explore the impact of scientific knowledge resources on innovative performance, as well as the mechanisms, in the science-based innovation practice of biotechnological industry. How scientific knowledge influences the firms’ innovative performance and how external scientific knowledge flows into the firms efficiently are important issues every high-tech firms must consider.


The authors chose biopharmaceutical firms in China as the sample of this study to empirically test the hypotheses.


The study introduces a framework combining scientific knowledge resources, technological capabilities and innovative performance and, then, follows with an empirical investigation on firms in Chinese biotechnological industry. Survey data from biopharmaceutical firms in China prove the significantly positive impact of both stocks and flows of scientific knowledge on firms’ innovative performance, as well as the significant mediation effect, of technological capability.

Practical implications

From the results of this study, the authors derive the important managerial implications that talent exchange, purchasing external knowledge directly and establishing R&D alliances are three effective ways leading external scientific knowledge to flow into the firms.


The study finds that technological capability plays an intermediary role between scientific knowledge resource and innovative performance; tacit scientific knowledge stock and R&D alliance influence innovative performance through technological capability totally among them.



The authors are indebted to Professor Check Teck Foo, Professor Weiwei Wu and anonymous reviewers for their many constructive insights and suggestions. The research was supported by the Key Project of Philosophy and Social Sciences Research Base, Ministry of Education, China (13JJD630006), the National Natural Science Foundation of China (71572017), Independent research project of the Scientific Research Institute of Tsinghua University (2014z04085), the Youth Social Science Talent funding Project, Beijing Federation of Social Science circles, Beijing, China (2015SKL011) and the Fundamental Research Funds for the Central Universities, Beijing Normal University, Beijing, China.


Chen, J., Jiao, H. and Zhao, X. (2016), "A knowledge-based theory of the firm: managing innovation in biotechnology", Chinese Management Studies, Vol. 10 No. 1, pp. 41-58.



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