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Indexing innovation within China

David McHardy Reid (Albers School of Business and Economics, Seattle University, Seattle, Washington, USA)
Guotai Chi (Department of Finance, Dalian University of Technology, Panjin, China)
Zhi Chong Zhao (Dongbei University of Finance and Economics, Dalian, China)
Ilan Alon (School of Business and Law, University of Agder, Kristiansand, Norway)

Competitiveness Review

ISSN: 1059-5422

Article publication date: 15 July 2019

Abstract

Purpose

Performed over a five-year time horizon, this paper aims to analyze the progression rates of technological innovation across 15 sub-provincial Chinese cities. The authors quantify and rate innovation performance, then rank the cities based on a purpose-built index designed to gauge the rate of technological progress.

Design/methodology/approach

Using the inferior constraint method, and a variety of national sources of data, the authors construct an innovation index based in part on new product sales revenue, proportion of college students, research and development expenditure of industrial enterprises in relation to gross industrial output value, contract deals in technical markets per capita, hazard-free treatment rate of waste, enterprises with technical development agencies accounts for industrial enterprises, number of high-tech enterprises and invention patent ownership per million population.

Findings

The findings provide a methodology for indexing cities, with 15 Chinese provincial cities as examples. Among the top five cities with the highest technological innovation index were Shenzhen, Nanjing, Guangzhou, Hangzhou and Wuhan. In the bottom were Shenyang, Changchun, Dalian, Xi’an and Harbin.

Research limitations/implications

This study applied a new model of innovation at the city level for China. Application to other industries (real estate, manufacturing, etc.) and countries will extend boundaries of this model and show its wider applicability.

Practical implications

Companies can use this research and methodology when seeking new investments in high tech and innovative products. Locations offering more hospitable environments should be prioritized ceteris paribus.

Originality/value

One weakness of much of the international business and competitiveness literature is that it often views the country as the primary unit of analysis. In this way, nuanced views of the institutional environments within countries are often overlooked. This paper proposes a measure of regional rates of innovativeness across China.

Keywords

Citation

Reid, D.M., Chi, G., Zhao, Z.C. and Alon, I. (2019), "Indexing innovation within China", Competitiveness Review, Vol. 29 No. 4, pp. 416-439. https://doi.org/10.1108/CR-09-2018-0059

Publisher

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Emerald Publishing Limited

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